Brief: U.K. gaming firm sold for $656 million

Tuesday, Dec. 22, 1998 | 11:43 a.m.

Ladbroke said it will use proceeds from the sale to Morgan Grenfell Private Equity Ltd. to reduce debt and strengthen its Hilton hotels unit and its gaming business. Morgan said it plans an initial public offering of Coral shares within five years.

The United Kingdom government rejected Ladbroke's 363 million-pound acquisition of Coral from U.i.brewer Bass Plc in September on the grounds it would stifle competition, and gave Ladbroke until March to find a buyer. Now Ladbroke is selling the U.K. part of Coral, which operates sports and horse-race betting outlets nationwide, for a profit and will keep Coral shops in Ireland.

While Ladbroke's failed takeover of Coral has yielded a financial gain, it has thwarted the company's expansion plans.

With U.K. authorities unwilling to let Ladbroke raise its 26 percent share of the retail betting market, and opportunities to expand in Europe limited, the company has little choice but to build up its Hilton International hotels unit, analysts said.

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