Gaming stocks a safe bet?
By Paul
With William Hill and Coral Eurobet both reported to be considering initial public offerings (IPOs), the British public may get a chance of a flutter of a different kind with the bookmakers, second and third largest respectively in the UK.

According to, William Hill would be valued at £1.2 billion ($1.7 billion) and Coral Eurobet at £850 million ($1.16 billion). No decision has yet been made, but as gambling legislation loosens in the UK, IPOs could be an attractive way for the two companies’ backers (William Hill is owned by Cinven Ltd and CVC Capital Partners, Coral Eurobet is owned by Morgan Grenfell Private Equity) to cash in their chips – or investments, as they are known in financial circles.

'We are a nation of gamblers now,' said David Pope, an analyst at Brewin Dolphin Securities in Newcastle, England. 'The people who own William Hill and Coral will have realized that their valuations are going up.' Analysts say that bookmakers are attractive to investors right now, with stable revenues and that protection against price deflation.

The gambling sector has fared well this year, with shares in Stanley Leisure up almost 50%, while Hilton has climbed about 18% and Power Leisure is up 16%. And betting shop chains like William Hill or Coral could trade at between 12 to 14 times earnings, analysts said.

Meanwhile, there is still the possibility that Coral Eurobet could be sold to Rank, Stanley Leisure, or Ladbrokes, although owners Morgan Grenfell have declined to comment. Morgan Grenfell has already appointed Lehman Brothers to advise on the disposal of the company.

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