Ladbroke talks with US Hilton
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A deal between Ladbroke and Hilton Hotels Corporation of the US looks increasingly likely after it emerged yesterday that chief executive Peter George has been holding talks with Steve Bollenbach, the new head of the American hotels group.
Mr George is eager to forge links between Ladbroke's Hilton International subsidiary and the US business from which it was spun off in the 1960s. Such a deal could pre-empt the bid for Ladbroke which the market believes Bass or Whitbread is preparing.
John Jackson, chairman, yesterday poured cold water on bid speculation. "Nobody has approached us and if anybody did they would find we are well prepared and if unwelcome would receive a warm reception," he said.
Confirming the improved chance of a deal with Hilton Corp, Mr George said: "Bollenbach being there increases the chances of co-operation. He recognises that our sharing the same brand name means there must be benefits in doing things together." This could involve co-operation on sales and marketing or it could go further.
Ladbroke announced disappointing figures for the 12 months to December. Group profits of pounds 121.3m were down on 1994's pounds 128.5m, despite higher profits from Hilton. Gaming and betting saw a collapse from pounds 97.7m to pounds 58.1m as the National Lottery hammered profits at Vernons pools and Ladbroke betting shops.
Announcement of the profits fall coincided with a call from the betting industry to the government to level the playing field with the lottery. Philip Jarrold, managing director of Vernons, told Parliament's National Heritage Committee that the company had cut back its workforce to 625 from over 1,000 in response to the lottery. Ladbroke took an exceptional charge of pounds 25.9m last year, including pounds 8.7m of reorganisation costs in betting and gaming operations.
A further 100 jobs were cut yesterday with the announcement that Ladbroke was combining its group headquarters in London with the offices of the hotel business at Watford, Herts.
Investment Column, page 21
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