UK's Hilton Hotels Sold
Published: Friday, December 30, 2005 Online-Casinos.com
UK'S HILTON HOTELS SOLD
Brit company will revert to its famous Ladbrokes brand and gambling focused
business
The big hotel deal has finally gone through - after weeks of negotiation and intense
speculation on both sides of the Atlantic the Hilton group announced in
London late yesterday (Thursday) that it is to sell its hotels to U.S. namesake
Hilton Hotels Corp for GBP 3.3 billion (US$5.67 billion) The deal, which
involves around 2300 hotels in the US owned by HHC and about 400 around the world
owned by Hilton Group, including 68 in the UK is to be completed early next year.
The US group is paying 11.3 times projected 2006 earnings of the UK business before
interest and taxes.
Its relevance to the gambling world is considerable, as the UK Hilton group, divested
of its hotels and cash-rich is expected to revert to its famous Ladbrokes brand
and focus its huge energies on both land and interactive gambling. With the progressive
British gambling reforms in place and UK licensing available some time in 2007,
there are clear synergies.
Nick Hodson, an analyst at Lloyds TSB Private Banking, said: "It does
seem to make sense for both sides. This allows a more focused play for the UK
in terms of Ladbrokes. "My hope is that, standing alone, Ladbrokes gets re-rated
to a similar kind of rating as William Hill."
Ladbrokes has been adding more shops and revamping existing ones to capitalise
on the fast-expanding UK gambling industry. The value of the overall UK gambling
market is expected to increase by 33 percent to GBP 11 billion by 2010 as more
casinos are opened and gaming laws are relaxed. Expansion into the US was "an
option".
A newly-independent Ladbroke plc has a rosy future despite private equity
bid interest, and has no big acquisition target on the horizon, Chief Executive
designate Christopher Bell said. The executive said that he was under no
pressure to go out and make an acquisition to bolster up a new Ladbrokes nor under
pressure from at least three private equity groups which have expressed interest
in bidding for Ladbrokes.
"We have the best brand in Britain and probably in the world and I feel under
no pressure to do a deal. I will concentrate on doing a good job," Bell said
in an interview.
Hilton UK confirmed last week (see previous InfoPowa report) that there was interest
in buying Ladbrokes and industry sources said at least three private equity groups
- BC Partners, Blackstone and CVC Capital - were in the line-up.
In the new Ladbrokes, Hilton's Ian Robinson will continue as chairman and Rosemary
Thorne from the Bradford & Bingley Plc banking group will take over as finance
director.
