UK’s Stanley Leisure Sold To Genting

For the second time in two weeks, a British gaming company has been purchased. It was announced that Genting Bhd, a gaming company owned by a wealthy Malaysian family, will purchase 80 percent of Stanley Leisure plc, for $901 million (483.6 million British pounds). Genting already owns the other 20 percent.

The UK government has loosened gaming laws and will issue 17 new casino licenses which is expected to set off a flurry of new casino development.

Genting International owns also owns 29.8 percent of London Clubs International (which is being sold to Harrah’s Entertainment) plc and is the owner and operator of Maxims Casino Club in London. It also has a joint venture with Stanley to bid for the regional casino under the new UK regime.

Tan Sri Lim Kok Thay, Chairman of Genting International, said the company believes this acquisition will help set the stage for more development in Europe. "We are delighted that the board of Stanley is recommending this offer and look forward to Stanley joining Genting International to create an even stronger base for its future in the UK and the rest of Europe."

The deal is smart for Stanley shareholders since it represents a 42 percent premium over the value of the company’s shares on August 4th before rumors began circulating of a possible sale. A run up the stock ensued, but the deal still gives shareholders 26.4 percent more for their shares than the values of the shares the day before the purchase was agreed upon.

"We are pleased to announce this recommended offer from Genting International. We believe that it represents fair value and provides appropriate certainty for our shareholders. Genting International has been a joint venture partner and supportive shareholder in Stanley Leisure since November 2004,” said  Bob Wiper, Chief Executive of Stanley. “We believe that, under Genting International's stewardship, exciting opportunities for the company and its employees will continue in the future."

Genting has been aggressively pursuing a purchase of a UK based company and had set up GII UK, a wholly-owned subsidiary for that purpose. GII UK was set up last May 16 as a United Kingdom and became a subsidiary of Genting International on September 7, 2006. According to materials announcing the purchase agreement, “GII UK has not traded since incorporation, nor has it entered into any obligations, other than in connection with the Offer and the financing of the Offer.”

According to a memo issued by Vincent Khoo, head of research at Hwang-DBS Vickers Research Sdn., and obtained by onlinecasinocrawler.com, the Stanley purchase “provides Genting the avenue to diversify from its Malaysian casino base and to participate in the anticipated brisk growth in the under-penetrated casino business in the U.K. as deregulation seeps in.”

Genting has more than two decades gaming experience developing, operating and/or marketing casinos and integrated resorts in different parts of the world, including Australia, the Americas, Malaysia, the Philippines and the United Kingdom.

Stanley has been in the British casino market since 1976, and built up its portfolio almost exclusively through acquisitions.

According to British Law, Genting only had to agree to buy shares owned by Chairman Leonard Steinberg, which account for 10.6 percent of the company’s outstanding shares for the deal to kick-start. This purchase, combined with the 20 percent Genting already owns, puts Gentings ownership at more than 30 percent, which triggers a takeover law that requires the sale offer to be made to all shareholders.

According to documents issued together by Genting and Stanley, Stanley’s board has recommended the sale of the entire company.

It is still possible other companies may attempt to make a higher bid for the remaining outstanding shares.

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