London Clubs says no bid talks as shares rise

 

 

Debt-laden casino operator London Clubs International Plc (LCI) told Reuters on Thursday it had not received a takeover offer and was not soliciting one, after speculation the company was in talks boosted its shares.

 

Its shares rose as much as 10 percent in early trading on Thursday, after a six percent rise on Wednesday. At 1220 GMT the shares were up six percent, or 1-1/4 pence at 23-1/4p.

 

"There is nothing on the table," said a spokesman for the company, whose portfolio includes London casinos Les Ambassadeurs and 50 St James.

 

But industry sources said the firm was likely to become a bid target, provided it reached an agreement with its banks to restructure its debts, which stood at 234 million pounds ($338 million) on September 30. 5g88

 

 

Britain's Stanley Leisure Organisation Plc (SLY), Rank Group Plc (RNK) and privately owned Gala Group have all shown an interest in buying part or all of London Clubs, while U.S. gaming giants Park Place Entertainment Corp (PPE) and MGM Mirage (MGG) are also looking to enter the UK market.

 

London Club's debt ballooned as it was forced to write down investments in Las Vegas mega-resort Aladdin, which filed for bankruptcy in September.

 

In November, London Clubs, which also runs casinos in South Africa, Egypt and Lebanon, freed itself from further obligations to Aladdin and opened talks with its banks, led by Bank of Nova Scotia (BNS), to restructure its debt.

 

"I think any bidders will hold off to see the debt issue resolved," an industry source said.

 

The London Clubs spokesman said talks with the banks were at an early stage, but that a deal was likely by the end of March. He added the firm believed it could return to profit as an independent group.

 

London Clubs made an operating loss of 4.3 million pounds for the six months ended September 30, excluding 99.8 million pounds written off from its Aladdin investments.

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