As reported by: Bloomberg News
William Hill Plc, the U.K.'s second- largest bookmaker, may buy Stanley Leisure Plc's betting shops for more than 500 million pounds ($945 million) as it seeks to supplant Ladbrokes as the country's industry leader.

Shares of Stanley Leisure, the biggest U.K. casino operator, rose as much as 14 percent to a record after London-based William Hill said in a statement it's in talks to buy about 600 outlets in the U.K. and Ireland to create a chain of about 2,200 bookmakers. Ladbrokes runs about 1,900 betting shops in the U.K.

"William Hill should be able to improve shop profitability significantly, as Stanley's operating profit per shop is around half'' as much as its competitor's, Lou Pirenc, an analyst at Morgan Stanley in London, wrote in a note to investors.

William Hill is pursuing the betting shops to boost earnings growth after raising annual profit by 19 percent. The company, which has about 1,600 betting outlets, is focusing on bookmaking after the government limited the potential to expand into casinos. The shares fell as William Hill delayed a proposed 453 million-pound return of capital while it looks at the shops.

Stanley Leisure shares rose as much as 66 pence to 538 pence in London. The stock was at 535.5 pence at 12:16 p.m. local time, giving the Liverpool, England-based company a market value of 691.5 million pounds.

Gambling Laws

Shares of William Hill fell as much as 18 pence, or 3.1 percent, to 555 pence in London. The stock was at 559.5 pence at 12:16 p.m. local time. Hilton Group Plc, which owns Ladbrokes, dropped 5.5 pence, or 1.9 percent, to 288.5 pence.

William Hill will proceed with the return of capital to investors if it cannot buy Stanley Leisure's outlets. The company expects to finish talks with Stanley Leisure by early May.

William Hill had planned to give money to shareholders after being deterred from expanding in the U.K. casino industry when proposed changes to the country's gambling laws were scaled back by the government at the end of last year. Earlier this month, the government reduced the number of Las Vegas-style super- casinos that can be opened in Britain to one from eight.

Malaysia's Ghenting Bhd., Asia's biggest publicly traded casino operator, owns 17 percent of Stanley Leisure's stock and may seek to combine the stake with its 22 percent holding in London Clubs International Plc, the owner of 11 casinos, the Financial Times said earlier this month, without saying where it got the information.
Article By: Bloomberg News