Aldersgate Investments Ltd / Arena Leisure plc
| Case Outcome | Mergers - phase 1 clearance |
| Decision Date | 26 March 2012 |
| Date | 26 March 2012 |
| Subject Matter | Mergers |
| Court | Competition and Markets Authority (EW) |
Anticipated acquisition by Aldersgate Investments Limited of Arena
Leisure plc
ME/5352/12
The OFT's decision on reference under section 33 given on 26 March
2012. Full text of decision published 2 April 2012.
Please note that the square brackets indicate figures or text which have been
deleted or replaced in rang es at the request of the parties or third parties for
reasons of commercial confidentiality.
PARTIES
1. Aldersgate Investments Limited (Aldersgate) is a company incorporated in
the British Virgin Islands and is wholly owned by family trusts controlled by
two individuals, David and Simon Reuben. Aldersgate owns Northern
Racing Limited (Northern), an operator of 10 horse racecourses in the UK
(it owns nine of these and manages the tenth, at Ffos Las in Wales).
Northern owns two per cent of the horse racing broadcaster, Attheraces
(comprising the television channel and the website).
2. Arena Leisure plc (Arena) owns and operat es seven horse racecourses in
the UK. It has a 45.85 per cent stake in Attheraces.1
Moreover, Arena
operates a catering and hospitality business, carries out property
developments associated with racecourses, operates two golf courses and
owns a hotel in Wolverhampton (and operates a second hotel at Lingfield
Park).
TRANSACTION
3. On 13 January 2012 Aldersgate announced its offer (by way of a scheme
of arrangement) to acquire all of the outstanding 70.2 per cent of shares in
1 BSkyB also owns 45.85 per cent of At theraces.
1
Arena that it does not already own. Apart from Aldersgate, the largest
shareholders in Arena are Coatbridge Limited (with 11.19 per cent of
shares) and Rumney Manor Limited (with 29.9 per cent of shares).
Aldersgate has received irrevocable undertakings from these two
shareholders to vote in favour of the scheme of arrangement so that
Aldersgate will acquire full control of Arena.2
JURISDICTION
4. As a result of this transaction Aldersgate and Arena will cease to be
distinct. Aldersgate already owns 29.8 per cent of Arena.3
The parties
submitted that therefore Aldersgate can be presumed to ha ve material
influence over Arena (for example, it can block special resolutions).
However, the parties also submitted that Aldersgate’s shareholding does
not confer on it any special rights. Therefore, the proposed transaction
shifts it from having material influence to full control.
5. Arena’s relevant turnover was around £72 million in the calendar year
2010 so the turnover test in section 23(1)(b) of the Enterprise Act 2002
(the Act) is satisfied. 4
6. The OFT therefore believes that it is or may be the case that arrangements
are in progress or in contemplation which, if carried into effect, will result
in the creation of a relevant merger situation.
MARKET DEFINITION
Product scope
7. The parties overlap in the op eration of racecourses in the UK. This
comprises a number of possible markets including the provision of
horseracing and the sale of media rights of horseracing (whether to be
shown in licensed betting offices (LBOs) or via other c hannels).
2 Statement by Aldersgate, ‘Recomm ended cash offer by Aldersgate I nvestments Limited for
Arena Leisure plc’, 13 January 2012.
3 Via an affiliated company, Reuben Br others Limited.
4 Comprising £62m from Arena itself and £10m from At The Races.
2
To continue reading
Request your trial