Brent Walker bank told best option is still refinancing

STANDARD Chartered, Brent Walker's lead bank, has been advised that it would be better to refinance the leisure company than dispose of William Hill, the betting shop chain, by way of a flotation or trade sale.

Lazards, hired by Standard Chartered, is believed to have concluded that 'the overall option which looks statistically best for everybody is still a refinancing'. Lazards itself was not available for comment.

But others close to the company, which completed a 15-month refinancing only in February last year, believe that while a refinancing may look best on paper, it would be difficult. 'You try a refinancing that involves pounds 370m of new debt for a company making operating profits of pounds 46m,' said one.

Lazards' view has led to a difference of opinion between Standard Chartered and the other banks that lent money to the Brent Walker rump on one side and those that lent to William Hill, the jewel in the group's crown, on the other.

The William Hill banks believe it is in their best interest to float or sell the betting chain now. Many think Standard Chartered prefers a group refinancing because the Brent Walker rump and its loans would be almost worthless without.

The 2,000-strong Pubmaster chain of public houses, recently hit by a pounds 210m write-down of its property values, would be the group's only substantial remaining asset.

N M Rothschild, adviser to William Hill, thinks a flotation would realise between pounds 500m and pounds 550m. It has advised that this would be preferable to a trade sale, partly because the present offers are not all in cash. Some are partly in shares.

It has also received at least three offers for the business - two from venture capital consortia, one led by S G Warburg and the second involving CINVen and Legal & General, and a third from Tan Jung, a Malaysian trading company.