Wembley bid battle hots up as BLB offers 860p-a-share

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The Independent Online

The saga for control of Wembley Plc, the stadium-turned-dogtrack owner, took another about-turn yesterday when the group's board, headed by Claes Hultman, plumped for a £308m bid from the US consortium BLB Investors.

The saga for control of Wembley Plc, the stadium-turned-dogtrack owner, took another about-turn yesterday when the group's board, headed by Claes Hultman, plumped for a £308m bid from the US consortium BLB Investors.

BLB's 860p-a-share increased cash offer caused the board to switch allegiance from the rival US gaming operator MGM Mirage. Only two weeks ago, MGM looked to be in pole position for Wembley, having upped its bid to 840p a share from 750p and secured a recommendation from the board.

This had trumped an 800p offer from BLB, which has a 22.3 per cent stake in Wembley and was left considering whether to take profits on its own shareholding or to raise the price yet further.

Not only has Sol Kerzner's BLB upped its price, but it has also matched MGM's offer to ringfence potential litigation liabilities surrounding some of Wembley's operations in the US. The prize asset in the group is its Lincoln Park racetrack in Rhode Island, which is fighting allegations of bribery from the US attorney's office.

BLB has promised to place the litigation liabilities of Lincoln Park into a separate company from its operating assets and has promised to return capital locked up in the company to shareholders if it wins its case. This could deliver an additional 12p to shareholders.

Jeff Disher, of BLB Investors, said yesterday: "BLB Investors believes that it is best positioned to realise the full potential of Wembley's businesses. Our increased offer is superior to the revised MGM proposal and represents a 63 per cent premium over Wembley's share price before any talks were announced."

But MGM may return again with yet another higher offer; it said yesterday it was "considering its options". Shares in Wembley raced ahead to 890p as the market anticipated a counter-bid.

Lisa Woodfin, an analyst at Robert W Baird, said "I think it is quite possible that MGM will come back. The bid increases have so far come in pretty small steps and even up to 900p, Wembley is still reasonably priced compared to other US racing track owners."

Although Wembley is primarily a US-based business, it owns six greyhound racing venues in the UK. BLB said it was watching proposals to deregulate gambling in the UK with interest, saying that some "interesting development opportunities" may arise.

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