Newspaper article The Evening Standard (London, England)

Hilton Backers in Line for Bumper [Pounds Sterling]4.2bn Handout

Newspaper article The Evening Standard (London, England)

Hilton Backers in Line for Bumper [Pounds Sterling]4.2bn Handout

Article excerpt

Byline: JIM ARMITAGE

HILTON GROUP is to hand shareholders a massive [pounds sterling]4.2 billion springtime cashback as it returns the proceeds of selling its hotels arm to its US sister company.

News of the huge return - higher than originally anticipated - came today as Hilton said it had completed the deal with Hilton Hotels Corp of America, leaving the UK group with the Ladbrokes betting arm.

The sum is made up of the [pounds sterling]3.3 billion proceeds of the hotels sale and [pounds sterling]900 million freed up from the Ladbrokes business by a refinancing programme.

Labrokes, headed by Chris Bell, has been inundated with takeover approaches from venture capitalists since the sale of the hotels was announced.

But Bell said he wanted to keep the business as a standalone quoted company.

He was today set to register the company's new name, Ladbrokes Plc, with Companies House.

Bell, who has for years played second fiddle to Hilton Group chief executive David Michels, said: "It is amazingly exciting. I've been waiting for it for a long time and, to be quite honest, I'm feeling a little giddy."

Michels, who has picked up a number of non-executive directorships since announcing he would leave, said he was considering working for venture capitalists.

Bell said he had no plans to take Ladbrokes into the private-equity arena.

"I've got a great business, a great bunch of people and great prospects as we are," he added.

Growth areas are abundant in Asia, where Ladbrokes has a joint venture with the state-run Chinese Sports Lottery in Beijing that has now been extended, he said.

Legal concerns and old-Hilton's links with Hilton Hotels Corp, have historically made Ladbrokes shy away from US online gambling, but Bell said: "We will very quickly be looking at whether we should enter that market."

The Ladbrokes division today reported pre-tax profits of [pounds sterling]266 million for the last calendar year, down from [pounds sterling]272.8 million a year earlier as a result of poor horseracing margins and losses to highrollers on telephone betting. …

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