Wembley gets new offer for US assets
Wednesday 09 February 2005
Taking on Wembley's troubled US business, which is in the midst of fighting bribery allegations in a US court, is BLB, a consortium backed by the South African gambling magnate, Sol Kerzner. BLB has returned to the table to buy Wembley's Lincoln Park gaming resort in Rhode Island after appearing to have secured support for the deal from local politicians.
The consortium had been in pole position to acquire the entire Wembley group last year when it outbid MGM Mirage, the Las Vegas casinos giant. But at the final furlong, BLB walked away from a 860p-a-share takeover because of uncertainty over whether it would get a long-term licence for Lincoln Park and a revenue-sharing agreement with the state authorities.
The Lincoln Park resort is at the centre of a high-profile court case involving its former chief executive, Nigel Potter. He is standing trial, alongside the Lincoln Park subsidiary and its managing director, Daniel Bucci, on corruption charges. They are accused of attempting to bribe their US law firm to win the group permission to install more video slot machines. Mark Elliott, the chief executive and former finance director, appeared in the witness box on Friday and was quizzed on the company's budget for legal payments.
Wembley and the individuals involved deny the allegations, but $16m has been ring-fenced to meet any liabilities arising from the trial. BLB's takeover is not conditional on its outcome. Should Wembley lose the case, it is likely to lose its operating licence.
BLB came back to Linoln Park after Donald Carcieri, the Rhode Island Governor, and other senior state politicians indicated they would back a long-term revenue-sharing deal with BLB. If this can be agreed, the takeover will go ahead and Lincoln Park will stay open. Claes Hultman, the chairman of Wembley, said, "This is a positive step towards the maximisation of value for shareholders."
The sale of the US unit leaves Wembley with only its UK dog tracks. A separate auction for its remaining assets has begun.
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