WilliamHill Takeover Of Stanley Leisure Shops?

Published: Friday, April 22, 2005 Online-Casinos.com

WILLIAM HILL TAKEOVER OF STANLEY LEISURE SHOPS?

GBP 500 million on the table

There were widespread reports in the British press at the weekend that William Hill is in advanced talks to buy Stanley Leisure's 620 betting shops for more than GBP 500 million in a move which would see it overtake Ladbrokes to become Britain's biggest high street bookmaker.

Most reports predicted that the companies would confirm to the Stock Exchange that Hills is doing due diligence on the Stanley estate - announcements from the two companies are likely to trigger interest from other bookmakers, too. Ladbrokes, which has 1,900 shops, is unlikely to sit back and watch Hills wrest away its leadership position in the UK.

Ladbrokes' attempt to buy Coral in 1998 was blocked by the Monopolies and Mergers Commission, the forerunner to the Competition Commission, and Ladbrokes would be expected to object to Hills buying Stanley's shops.

Hills, which has 1,610 shops, is also expected to tell the market that it has postponed plans to return GBP 453 million cash to shareholders while it explores the acquisition of the Stanley betting shop business.

David Harding, Hills chief executive, announced the planned cash return last month alongside the full-year results. At the time, he said he was looking over time to add "600 shops" to Hills betting shop estate, arguing that this was unlikely to infringe competition rules.

His comments are believed to have triggered another round of talks with Stanley's chief executive Bob Wiper. The pair are believed to have had preliminary talks before, though until now have failed to agree on price. Few bookmakers could achieve the same synergies as Hills and the latest proposal is more generous, given that Stanley's equity is valued at only GBP 610 million and it also owns more than 40 casinos. It has about GBP 200 million debts.