Legal & General Ventures (LGV), a well established provider of private equity, acquired Moliflor Loisirs in March 2002 for around €400 million (US$351 million). The family business, founded in France in 1948, owned 16 casinos around the country, mostly in medium-sized border and coastal towns, and was the fourth largest casino operator in France. Following the buyout by LGV an additional four casinos had been acquired, but the decision taken by LGV to withdraw from continental Europe has led to the casino chain being sold once again.

The company about to acquire Moliflor is another UK-based private equity firm, Bridgepoint, which has a portfolio of investment in over 150 all-sector businesses throughout Europe and with offices in London, Birmingham, Paris, Frankfurt, Madrid, Milan and Stockholm. The actual cost of the deal to acquire Moliflor has not yet been disclosed but would appear to exceed the price paid by LGV in 2002, although not by much. The French casino market is the largest in Europe and has good prospects for future growth.

Some analysts consider that UK casino operators could look to France for expansion in the future. Consolidation has been the name of the game and it is significant that as recently as 1998 seven players held 63% of the French casino market. The top four casino companies now control around 80% following last year’s merger of Accor and Groupe Lucien Barriere. France recently announced plans to place casinos on a strategic list to prevent foreign takeovers, but any such protectionist action would doubtless come under scrutiny by the European Commission. There are around 180 licensed French casinos and 47 licensed operators in 10 major groups. However, casino operations are only permitted in towns with special status such as spas. This has led to rapid growth in online gambling in France, with play estimated to be twice as often and three times longer than in Britain. Slot machines have brought a return of profitability to French casinos where previously the tables-only operations suffered from high running costs and heavy taxation.

Moliflor describes its slot machines as being at the heart of its operations, present at all locations. The company also offers a large range of table games at most of its establishments, including the traditional games of roulette, boule, blackjack and stud poker. As might be expected in France, a high priority is given to the development of its restaurants/bars. Bridgepoint claims a 25-year track record of buying established businesses and working with the management to create and release value within companies across Europe. Moliflor Loisirs is presently the third largest casino operator in France. (E-11.09.05)

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