|
Ladbroke in $1.9B Stakis deal
|
 |
February 8, 1999: 10:51 a.m. ET
U.K. hotel and gaming group Ladbroke buys rival in cash and stock bid
|
LONDON (CNNfn) - U.K. hotel and gaming group Ladbroke Monday confirmed details of a 1.16 billion pound ($1.9 billion) offer for its smaller Glasgow-based rival Stakis.
The deal will make Ladbroke the second largest hotel operator in the U.K. Granada's (GAA) Forte retains the top slot, with more than 21,000 rooms.
Ladbroke owns exclusive rights to the Hilton Hotel name outside the U.S. It will re-brand Stakis hotels under the Hilton name, more than doubling Hilton hotel rooms in Britain to over 16,000.
Stakis operates 53 three and four-star hotels, about 22 regional casinos, and 63 Living Well fitness clubs.
Analyst Nigel Reed of French bank Paribas said the deal was good for both companies. "Judging how the price of the shares has moved in both companies, the market thinks this is a good deal, and that would seem the right response," he said.
"Re-branding Stakis hotels will allow them to push up prices, and as number two chain, will give them far more marketing clout," he said.
The offer represents a 32 percent premium over the Stakis share price last Wednesday, the day before Stakis confirmed it was in talks.
Ladbroke shares jumped 15.58 percent Monday to 267p. Stakis shares are up 11.35 percent to 156 pence.
The deal has been recommended to shareholders by the Stakis (SKS) board, and values each share in Stakis at 144.25, or 146 including the Stakis final dividend.
That breaks down to 57.7 pence in cash and 0.382 Ladbroke shares for each Stakis share based on Friday's closing price. The hotel group expects to save at least 16 million pounds a year by 2000.
"This is a fair price that we have agreed, but there is always a danger that someone else will come in with a bid," Ladbroke chief executive Peter George told Reuters.
Stakis chief executive David Michels will become the new chief executive of Ladbroke's (LADB) Hilton International division. 
|
|
|
|
|
|
Ladbroke
Stakis
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
