By Eric Gillin
TheStreet.com Staff Reporter
01/27/2004 04:13 PM EST
As the U.K. weighs changes to its gaming laws, MGM Mirage (MGG:NYSE - commentary - research) continues to make moves to capitalize on deregulation, announcing that it will buy Wembley, a U.K. gaming firm, for $493 million in cash.
MGM Mirage announced the purchase on Tuesday morning, telling investors that Wembley's board of directors had unanimously approved the deal, which valued one share of the company at $13.65 -- slightly north of $490 million based on current exchange rates. In addition to buying Wembley's U.K. greyhound tracks in Wimbledon, Manchester, Birmingham, Oxford and Portsmouth, MGM picks up racetracks and other properties in Rhode Island and Colorado.
"Wembley's leading position in Rhode Island represents a strong fit with our existing gaming operations and will allow us to leverage our significant gaming expertise and strong balance sheet ac**** the Wembley group," said J. Terrence Lanni, Chairman and CEO of MGM Mirage. "Additionally, Wembley owns sites in the United Kingdom, which could complement our plans to develop facilities in the United Kingdom, should appropriate gaming reforms be adopted."
The move comes as part of a wider gold rush into U.K. gambling properties. Deregulation of the U.K. gambling laws has been weighed since 2001, but in the last year has really picked up steam, culminating with a mention in the queen's speech to Parliament two months ago. With support in the government, a draft of the gambling deregulation bill is expected to pass by 2005, which would abolish a variety of laws and make the U.K. a lot more like Las Vegas.
At a gaming forum in London with all the leading U.S. and U.K. operators, William Schmitt, gaming analyst for CIBC World Markets, said legislation would be ready for a vote by the end of the summer. "It appears that much still needs to be ironed out and that the devil is certainly in the details. We came away with the belief that legislation will be passed in the fall session," said Schmitt. (CIBC or one of its affiliates has received compensation for investment banking services from MGM in the last 12 months.)
TheStreet.com Staff Reporter
01/27/2004 04:13 PM EST
As the U.K. weighs changes to its gaming laws, MGM Mirage (MGG:NYSE - commentary - research) continues to make moves to capitalize on deregulation, announcing that it will buy Wembley, a U.K. gaming firm, for $493 million in cash.
MGM Mirage announced the purchase on Tuesday morning, telling investors that Wembley's board of directors had unanimously approved the deal, which valued one share of the company at $13.65 -- slightly north of $490 million based on current exchange rates. In addition to buying Wembley's U.K. greyhound tracks in Wimbledon, Manchester, Birmingham, Oxford and Portsmouth, MGM picks up racetracks and other properties in Rhode Island and Colorado.
"Wembley's leading position in Rhode Island represents a strong fit with our existing gaming operations and will allow us to leverage our significant gaming expertise and strong balance sheet ac**** the Wembley group," said J. Terrence Lanni, Chairman and CEO of MGM Mirage. "Additionally, Wembley owns sites in the United Kingdom, which could complement our plans to develop facilities in the United Kingdom, should appropriate gaming reforms be adopted."
The move comes as part of a wider gold rush into U.K. gambling properties. Deregulation of the U.K. gambling laws has been weighed since 2001, but in the last year has really picked up steam, culminating with a mention in the queen's speech to Parliament two months ago. With support in the government, a draft of the gambling deregulation bill is expected to pass by 2005, which would abolish a variety of laws and make the U.K. a lot more like Las Vegas.
At a gaming forum in London with all the leading U.S. and U.K. operators, William Schmitt, gaming analyst for CIBC World Markets, said legislation would be ready for a vote by the end of the summer. "It appears that much still needs to be ironed out and that the devil is certainly in the details. We came away with the belief that legislation will be passed in the fall session," said Schmitt. (CIBC or one of its affiliates has received compensation for investment banking services from MGM in the last 12 months.)
