Bid war on the cards as sector giants stalk First Leisure

Predators are believed to be circling First Leisure, the bingo to nightclubs group run by Michael Grade, former head of Channel 4. But Mr Grade is thought to be keen to maintain First Leisure's independence, having only just taken over the group, which was founded by his uncle, Lord Delfont.

Speculation is mounting that Bass, the brewing and leisure group, is considering a pounds 630m takeover bid, a substantial premium to First Leisure's market capitalisation of just pounds 509m. City observers believe Rank, the Hard Rock Cafe to bingo group, is also interested in First Leisure and may join a bidding war for First Leisure if Bass makes a formal approach.

However, First Leisure has indicated bidders would have to offer a much higher price than pounds 650m to stand any chance of success. "A pounds 650m bid would get short thrift from First Leisure. It would mean a short-term gain for shareholders but Michael Grade has plans to make this a much bigger company," a spokesman said yesterday.

Nevertheless, now would be a good time for predators to strike as First Leisure's shares have slumped from a 376p high earlier this year to 311p and have significantly underperformed the market and the leisure sector over the past 12 months.

Research published this year by leisure analysts at NatWest Securities suggested First Leisure would be an attractive bid target for Bass and other large international leisure groups.

First Leisure recently announced a fall in profits for the half year to April from pounds 18.1m to pounds 17.2m. But Mr Grade is keen to prove he can turn around the group which owns a diverse set of leisure attractions from the Blackpool Tower to Brannigans music bars.

He has already announced a wide-ranging shake-up of the troubled bingo division by installing new management from Rank. He is also looking to expand its health and fitness division following the acquisition of the Riverside chain of clubs.

Bass declined to comment on the market speculation but is thought to be keen to pull off an acquisition after the Government blocked its bid for Carlsberg-Tetley, which would have made it the UK's largest brewer. It is also still in the running to buy bookmaker William Hill from Brent Walker. Analysts believe the bookie could fetch more than pounds 650m. Bass has reached the final bid stages but is facing stiff competition from CinVen, the venture capitalist.

If Bass is unsuccessful in acquiring either business it is likely to concentrate on its international operations. It plans to expand its Chinese brewing interests and is thought ready to take its themed-bar chains such as All Bar One to continental Europe.

Mr Grade is currently looking at ways to expand First Leisure's leisure interests. "We will consider anything. I want to make this company more innovative and to encourage people to come to me with new ideas," he said at the time of the interim results announcement.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Content Writer - Global Financial Services

£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Web Developer - PHP

£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Loan Underwriter

£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935
The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory