Reubens among the runners at Lingfield

17 December 2006 - Sunday Times

 Reubens among the runners at Lingfield

THE Reuben brothers, the billionaire private investors, have secretly amassed a near 14% stake in Arena Leisure, the owner of Royal Windsor and Lingfield racecourses, triggering speculation that they could be mulling a takeover approach, writes Jenny Davey.

Trevor Hemmings, the multi-millionaire owner of Blackpool Tower , owns more than 40% of the company through two of his investment vehicles, Guild Ventures and Rumney Manor.

HBOS, one of his key financial backers, owns a further 5.16% through its Uberior Investments division.

The Reuben brothers' identity on the share register has been kept under wraps because it has been acquired using a derivative known as a contract for difference (CFD).

City sources said the brothers had built a position because they were keen to gain a seat at the negotiating table as they regard Arena as an undervalued business with quality assets.

The buyer of a CFD pays only a fraction of the value of the underlying stock to acquire a position, making it a cost-effective way of getting an influential stake in a company.

Instead of actually buying and holding a share, the CFD purchaser benefits from the price movement.

Traditionally, a CFD holder has no shareholder voting rights and receives no share certificate; as a consequence he pays no stamp duty.

Arena's shares rose 5.5% on Friday, closing at 57p amid rumours of the stake-building.