If it’s the opening week of August, then football must surely dominate the sporting headlines, no?
Of course it does.
But while the nation’s richest clubs finalise their bi-annual spending spree, splashing the cash on unheard-of foreign stars, most of whom will fail to make much impact inside the Premier League’s gilded cage, so the sporting summer’s biggest financial transaction is likely to involve the transfer of a large portion of Britain’s undulating greenswards for around £200 million.
After Arena Leisure - owner of seven UK racecourses, including Doncaster, Lingfield Park, Wolverhampton and Worcester - announced its interim results on Monday, so the scramble to buy the business intensified.
The process had actually begun six weeks ago following that euphemism for corporate action, the ‘strategic review’.
In late June, Arena Leisure’s board was said to be “considering its options” after a report written by the company’s investment bank, Investec, concluded the business should be put up for sale.
Investec’s report prompted speculation that the billionaire Reuben brothers, who own almost 30% of Arena, could launch a bid for the rest of the organisation.
However, the well-known leisure investor, Trevor Hemmings, best known for his ownership of Grand National-winning racehorses Hedgehunter and Ballabriggs, also owns more than 41% of Arena.
While it was thought unlikely he would make an offer for the whole company, it was understood he would consider offers above 60p a share for his stake.
Once details of Investec’s report became known, Hemmings, one of the stock market’s canniest operators, saw Arena’s share price leap 41% from 29p to 41p, though they have since fallen back to 38p, a level which values the company at £132 million.
Also sitting pretty on a sizeable chunk of Arena shares are the Reuben brothers. Not only have the pair secured a healthy stake in the company, they also happen to own Northern Racing which owns and operates ten UK racecourses including Newcastle, Sedgefield, Uttoxeter, Hereford and Chepstow.
Northern Racing alone accounts for around 15% of all UK racing fixtures. When combined with Arena Leisure’s course ownership, the two companies jointly account for more than a third (35.5%) of all UK racing fixtures.
Like Hemmings, the brothers are shrewd operators. Amongst their largest investments is the Wellington Pub Company, which has around 850 tenanted pubs, the UK’s largest ‘free of tie’ pub estate.
Arena Leisure would be an attractive investment fit for the brothers, even after announcing on Monday that its total half-year revenue had fallen by £1.9 million to £28.2 million.
This followed the impact of a £4.9 million reduction in Horse Racing Levy funding received by the company which meant that profits before interest and tax fell by £600,000 to £1.4 million.
