Newbury fights hostile bid for its century-old racecourse

A battle is being fought over the future of the century-old Newbury Racecourse after the group rejected a £33.5m hostile takeover bid from its biggest shareholder, the investment company Guinness Peat.

Lady Lloyd-Webber, the third wife of the musical theatre composer Lord Lloyd-Webber, is Newbury's second-largest investor and, as a director of the board, is opposed to the takeover.

Guinness Peat (GPG), which is chaired by Sir Ron Brierley, is concerned that the board's £45m plans to redevelop Newbury, which inc-lude building a 120-bed hotel and selling off land to a housing developer, are not in the best interests of shareholders. GPG owns a 21 per cent stake in Newbury. Lady Lloyd-Webber, who is a member of the Jockey Club and the owner of Watership Down Stud, near Newbury, has a 12.7 per cent stake. The Berkshire track is home to the Hennessy Cognac Gold Cup and the Juddmonte Lockinge Stakes. The company is listed on Plus Markets and made a pre-tax loss of £1.37m in the six months to the end of June, on turnover of £2.59m.

Newbury has been working on plans to develop the track and the surrounding area for more than two years in order to generate more income and make it a more attractive place to visit. The course operates race days for just 32 days of the year, so the company must also rely on other revenue streams. Although the site operates as a conference centre and wedding venue, there is no hotel in the vicinity. David Wilson Homes are the preferred developer to build housing on the three sites that the board has earmarked for sale.

Blake Nixon, the chairman of GPG Acquisitions, said the plans were "ill-considered", as they would potentially mean being tied into a 10-year joint venture with a housebuilder. GPG is also concerned that the Newbury board will sell the land at an inadequate price. GPG estimates that the 50 acres of land for sale should fetch at least £21m. "We would be favourable if this relatively low hurdle was met but this has not been confirmed by the board," Mr Nixon said.

Newbury is chaired by the former Marks & Spencer director Sir David Sieff. Erik Penser, another board member and the owner of a stockbroking firm in Stockholm, is the third-largest shareholder, with a stake of 9 per cent. A large number of retail investors hold shares in the company, many of them descendants of the founders of the racetrack.

GPG has 28 days to send out its offer document to shareholders. Mr Nixon said he was "fairly confident that investors would see their point of view". If the offer were to succeed, Mr Nixon said GPG would take control of the board and conduct a strategic review.

Newbury held its first race meeting in September 1905 and moved to its current location, alongside Greenham Common, in 1910. The racecourse also boasts a runway for light aircraft and has its own railway station.