Higher MGM offer puts spark back into Wembley bidding

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The Independent Online

The bid battle for Wembley, the former owner of the eponymous stadium now turned racetrack and gaming group, intensified yesterday.

MGM Mirage, the Las Vegas casino operator, raised its offer from 750p a share to 840p.

MGM's new cash offer requires approval from just 50 per cent of Wembley's shareholders compared with 75 per cent under its previous offer, which was organised as a fast-track scheme of arrangement.

The move immediately threw the spotlight back on to the rival bid consortium BLB Investors, which includes Kerzner International and Starwood Capital. BLB captured 22.3 per cent of Wembley when the fund manager Active Value sold at 800p.

BLB then made an offer for the whole company at the same price and is this weekend contemplating whether to raise its bid to match MGM's latest offer or simply take its profits.

Shares in Wembley rose from 858.5p to 872.5p yesterday in anticipation of a higher bid from BLB.

MGM's revised offer, which is being recommended by the Wembley board, came just a day after MPs and peers endorsed the Government's plans to liberalise UK gaming law. However MGM's main interest lies in Wembley's US gaming interests which include Lincoln Park racetrack in Rhode Island and casinos in Colorado.

The US Attorney's Office last year began legal proceedings against Lincoln Park and Wembley's former chief executive, Nigel Potter, alleging attempted bribery. Another Lincoln Park director, Daniel Bucci, is also named in the indictment. The directors and the company all deny the allegations and have said they will defend the action vigorously.

However, MGM's revised offer yesterday contained arrangements to separate the Lincoln Park business from the litigation by placing the operating assets of Lincoln Park in one company, with another company assuming the legal risks. Terry Lanni, the chairman and chief executive of MGM, said: "Our increased offer is unanimously recommended by the Wembley board and its value is clearly superior to that of BLB's offer even before taking into account any value attributable to LPR [the company fighting the Lincoln Park court case]."

MGM's US assets include the Las Vegas casinos the Bellagio, the MGM Grand and the Mirage.