14 January 2012 – The Times
The Reuben brothers added Arena Leisure to their stable of interests last night after protracted talks over a £200 million bid finally crossed the finishing line.
David and Simon Reuben, who own Northern Racing, announced a recommended 44¼p-a-share bid after Trevor Hemmings, the former Blackpool Tower owner, used his 41 per cent stake to back the offer.
The offer from their Aldersgate Investments vehicle, which comes after several deadline extensions by the Takeover Panel, values Arena at £167 million, or almost £200 million including debt of about £32 million. Arena runs seven racecourses, including Doncaster, Royal Windsor and Lingfield Park, and holds a 46 per cent stake in AtTheRaces, a media rights venture with BSkyB and other parties.
The Reubens, who bought Northern Racing four years ago for £90 million, already own 29.8 per cent of Arena and have long been tipped to buy the rest. The key to unlocking a deal was Mr Hemmings, who had said last year he would not accept anything less than 60p a share. Aldersgate, which was advised by HSBC, said that the offer represented a 37 per cent premium to the 32¼p the shares were trading at before The Times disclosed that Arena was set to appoint Investec to find buyers amid interest from the Reubens.
Management, led by Mark Elliott, had sought to diversify Arena’s revenue streams by launching a caterer and signing a media rights deal with Satellite Information Services. However, the shareholder structure meant that their efforts had little impact on the share price and it was decided that a sale could crystallise value.
Mr Elliott and Tony Harris, the finance director, will leave once the deal goes through. They will receive payouts of, respectively, £351,000 and £218,000, equivalent to a year’s salary and benefits, and will have their bonuses and share options paid out.
Aldersgate said that Arena would be under the same management as Northern Racing, creating a combined group of 17 racecourses with about 40 per cent of the racing fixture list. The deal is expected to be scrutinised by the Office of Fair Trading.