The Malaysian gaming firm Genting agreed to take over Stanley Leisure yesterday in a deal valuing the UK casino operator at £639m - but the shares soared amid speculation about a potential bidding war.
Genting, which already owns 20 per cent of Stanley, said it would buy the rest of the shares for 860p. Stanley shares rose 20.5p to 875.5p, above the offer price, amid rumours that the US group Harrah's Entertainment may launch a counter-bid.
The Las Vegas-based Harrah's, the world's biggest casino group, broke up a proposed nil-premium merger between Stanley and its UK rival London Clubs International earlier this month when it agreed a £280m bid for London Clubs. The big question now is what Genting will do with its 29.7 per cent stake in London Clubs.
Wayne Brown, at Altium Securities, thought Genting might launch a counter-offer for London Clubs. "The market is clearly expecting some more activity in the sector," he said. Analysts believe a rival bid for Stanley is less likely as Genting now controls 30.5 per cent of the shares, including backing from Stanley's founder and chairman Lord Steinberg.
Lord Steinberg is in line for a £66m windfall as Genting acquired 5.3 per cent of his shares yesterday and will be able to buy another 5.3 per cent from him under a call option.
The Malaysian group, a family-run business, is shoring up its position before the full deregulation of Britain's gaming sector, which will bring licences for a new Las Vegas-style "super-casino", as well as eight small and eight large casinos around the country.
Stanley runs 45 casinos across Britain and has international betting interests in Italy, Belgium, Germany, Croatia and Romania through joint ventures.
Separately, Sportingbet shares crashed 40 per cent after they returned to trading yesterday morning. The online sports-betting group suspended the stock on Thursday after its chairman, Peter Dicks, was arrested at John F Kennedy International Airport in New York on Louisana state charges of "gambling by computer".
After two nights in a New York jail he was released, after putting up bail of $50,000 (£27,000). He surrendered his passport and must stay within New York. A further hearing will take place on Thursday to consider his transfer to Louisiana.
Shares in Sportingbet closed down 95p at 144p yesterday, giving the company a market value of £607m, down sharply from a £2bn peak earlier this year.Reuse content