Ladbroke buys Stakis chain for pounds 1.2bn

LADBROKE, THE hotels and gaming group, yesterday moved quickly to complete its bid for Stakis, the Glasgow-based hotels chain, with a recommended cash and share offer valuing the group at pounds 1.16bn.

The deal, which comes just five days after talks were first disclosed, sparked a surge in both companies' share prices with Stakis shares soaring 11 per cent to 157p.

This is well in excess of the 144.25p offer price indicating the possibility of a rival offer from another leisure group such as Whitbread or Accor of France.

However, Ladbroke said the Stakis share price could be explained by the rise in its own shares, which closed 16 per cent higher at 269p thereby increasing the value of the share element of its offer. The deal is likely to signal the disappearance of the Stakis name, as its hotels will be rebranded under Ladbroke's Hilton name. It will net the Stakis family around pounds 60m including pounds 10m for the founder, Sir Reo Stakis, the 85-year- old Greek Cypriot, who set up the business in 1942.

"Reo voted for the deal but I'd being lying if I said he'd done so without a tear in his eye," said Stakis' chief executive David Michels who helped restore the group's fortunes after its near collapse seven years ago. He added: "I suppose it's a bit like watching your mother-in-law drive off a cliff in your new car."

The deal takes Ladbroke from 38 hotels to 93 and makes the combined group the largest operator of four star hotels in the country and the third largest hotels group in London after Granada and Thistle. It also creates the UK's second largest gaming group after Rank with Ladbroke's five London casinos added to Stakis' portfolio of 22, mostly provincial sites. "It is rare to find a business that represents such a perfect operational mix and complementary geographic fit," said Peter George, Ladbroke's chief executive.

The deal sees Mr Michels elevated to Ladbroke's main board and appointed head of its enlarged Hilton hotels division. He will replace David Jarvis who could be in line for a pounds 1m pay-off. However, Mr George denied that the Stakis man is being groomed as his successor.

The deal nets a pounds 1.5m shares and options windfall for Mr Michels, although he will take 60 per cent of the proceeds in Ladbroke shares. Stakis staff, who own around 3 per cent of the company will net over pounds 30m between them.

The takeover will result in annual cost savings of pounds 16m from next year. There will be job losses, with the Stakis head office in Glasgow moved to Watford and the likely closure of overlapping divisional offices. However, Mr Michels said the company will maintain a presence north of the border.

The terms of the Ladbroke offer are 57.7p in cash plus 0.382 new Ladbroke shares for each Stakis shares held.

Start your day with The Independent, sign up for daily news emails
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Syria civil war: Meet the military commander who says his soldiers will not rest until every inch of their war torn country is free of Islamist 'terrorists'

‘We won’t stop until Syria is back to normal’

Near the front lines with Islamist-controlled towns where Assad’s troops were besieged just last month, Robert Fisk meets a commander confidently preparing his soldiers for battle
The inside story of how Bill Clinton built a $2bn global foundation may undermine Hillary's chances

The inside story of how Bill Clinton built a $2bn global foundation...

... and how it may undermine Hillary's chances in 2016
12 best olive oils

Extra-virgin, cold-press, early-harvest, ultra-premium: 12 best olive oils

Choosing an olive oil is a surprising minefield. Save yourself the hassle with our handy guide
Rafa Benitez Real Madrid unveiling: New manager full of emotion at Bernabeu homecoming

Benitez full of emotion at Bernabeu homecoming

There were tears in the former Liverpool manager’s eyes as he was unveiled as Real Madrid coach. But the Spaniard knows he must make tough decisions if he is to succeed
Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?