Tuesday, March 30, 2004 | 11:17 a.m.
SUN STAFF AND WIRE REPORTS
Lodging giant and Aladdin co-bidder Starwood Capital Group LLC and Kerzner International Ltd., the owner of the Atlantis resort in the Bahamas, today offered to buy Wembley Plc for 287 million pounds ($523 million), topping a $491 million bid from MGM MIRAGE as the U.S. companies seek control of gambling venues in Britain and Rhode Island.
Las Vegas-based MGM, the third-biggest U.S. casino company, today declined to say whether it would increase its cash offer after BLB Investors LLC, a company formed by financier Barry Sternlicht's Starwood, Kerzner and Waterford Group LLC, bid 800 pence.
Wembley owns a big track in Rhode Island and dog tracks in London and Birmingham, sites that may be expanded into casinos as the U.K. considers relaxing rules that limit slot machine payoffs and restrict gambling to members. Britain may generate $2.3 billion in annual gambling revenue if those laws change, Lehman Brothers analysts estimate.
Shares of Wembley, based in London, rose to their highest in more than 13 years, and were up 15 pence at 855 pence by 2:49 p.m. Wembley, whose board in January backed MGM's offer, will hold talks with both MGM and the Starwood-led group, it said in a Regulatory News Service statement today.
Starwood Capital is headed by Sternlicht, 43, founder of Starwood Hotels & Resorts Worldwide Inc., the owner of the Sheraton and Westin chains and an investor in the partnership bidding for the bankrupt Aladdin resort on the Las Vegas Strip.
Kerzner, based in Paradise Island, the Bahamas, owns the Atlantis Resort there and also operates resorts in Mexico and Mauritius. It developed the Mohegan Sun casino in Connecticut with Waterford.
MGM MIRAGE spokesman Alan Feldman said company officials "are considering all of our options" after news of the counteroffer for Wembley.
Wembley also owns the Lincoln Park greyhound track in Rhode Island and three greyhound tracks and a horse racing track in Colorado.
Bloomberg News and the Las Vegas Sun contributed to this story.
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