British hotels and gaming firm Ladbroke Group Plc has unveiled an agreed £1.16 billion sterling (€1.68 billion) cash and share offer for Stakis Plc yesterday hoping to break a run of bad luck as a dealmaker. Stakis owns two hotels in Ireland, one in Charlemont Place, Dublin and the other in Templepatrick, County Antrim.
If completed, the agreement with Stakis, the Glasgow-based hotelier and casino owner, will push Ladbroke's Hilton International division to number two spot in the British hotel industry behind Granada's Forte, and make it the largest four-star luxury hotel chain. Hilton International considered opening a hotel in College Green in Dublin, but abandoned it because of protracted planning delays.
Ladbroke's chief executive Mr Peter George said the Stakis deal was an "excellent" fit, adding considerable scale to its operations across Britain. He said that Stakis was always Ladbroke's number one target in Britain, while Stakis' casinos and health clubs also made a good fit.
"This will double our number of hotel rooms to over 16,000 and make us clearly the number one four-star luxury hotel chain in Britain," said Mr George after the deal was announced.
Mr George is keen to see the deal completed after being outbid by Bass for Inter-Continental hotels early last year. Then its purchase of Coral betting shops was revoked by the Monopolies and Mergers Commission (MMC) and it was forced into a sale.
The group said it sees annual costs saving of at least £16 million sterling by the year 2000 from the Stakis deal and expects the move to be earnings enhancing in the current financial year.
Ladbroke is offering Stakis shareholders 57.7 pence of cash plus 0.382355 new Ladbroke shares for every Stakis share held, as well as the Stakis final dividend of 1.75 pence a share.
Ladbroke shares ended up 38 pence at 269 pence, as analysts welcomed the deal, while Stakis shares rose 16 pence to 157 pence in line with the offer.
Mr George said the deal brings together Ladbroke's 38 Hilton UK hotels with 53 Stakis hotels, and Ladbroke's five London casinos with 22 Stakis, largely provincial, casinos. Stakis also has 67 LivingWell health clubs, some based in Hilton properties.
Stakis' chief executive Mr David Michels will become the new chief executive of Ladbroke's Hilton International division and joins Ladbroke's executive board. He said 200 jobs at Stakis Glasgow headquarters were under review as the new combine would be based at Ladbroke's head office at Watford, near Lonodon.
