The Reuben Brothers

krizon

krizon

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Anyone interested in knowing the latest on the billionaire bros business background, go to http://www.reubenbrothers.com for an oversight of their investment and development portfolios in the UK, Singapore, and elsewhere. The brothers have put in an undisclosed bid for Arena Leisure and, as of last week, received a third extension for further considerations on the issue. As you know, they bought out Northern Racing from Simon Clarke following the death of his dad, Sir Stanley, which provides 15.5% of the fixtures list. Adding in Arena's portfolio, including some 85 meetings a year at Lingfield alone, will make it the prime provider of racing in the UK.

The brothers are tough businessmen and not known for making generous offers for businesses, or for continuing to support those which fail to bring them the sort of improvements in income which they seek after takeover.

Staff at Arena's courses are somewhat on tenterhooks as they await the outcome after three edge-of-the-seat moments. The Reubens will expect value for money and I'm sure there'll be some restructuring managerially, and I imagine they'll want to roll out the same deal for bookies' pitches that they initiated at the Northern courses. Interesting times ahead.
 
Commercial operators of racecourses are a massive drain on the sport. From a position a few years ago when racing was mainly funded by the Levy, the balance has now swung and there is a huge amount of money flowing to the racecourses for media rights. Unfortunately these funds are applied at the discretion of the racecourses; if they choose to pay big dividends to shareholder investors that is their right. Unfortunately it means that large sums leave racing into other hands, leaving prize money at a pitiful level.
 
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Interesting indeed Kri - hopefully (from what I've read) they'll be able to put the extra money they get back into prize money rather than into lining peoples pockets.

Lest not forget that racecourse bookmakers at the likes of Lingfield, Southwell, Wolverhampton etc. are hardly raking the cash in at the moment with courses continually promoting the Tote at the expense of the on-course betting opportunities in the betting ring.

Fingers crossed this works out well but having two people with such a large stake in British racecourses can't be good for UK racing on the whole, unless they plan on operating in a similar way to Sheikh Mohammed (ie. at a loss) which I can't see happening.

Martin
 
There will be nothing altruistic about these guys any more than the present owner (Trevor Hemmings), IS. Arena's shareholders won't permit that to happen. I wouldn't be surprised to see them try to expand the venues to include a wider range of 'leisure opportunities', like more golf clubs, spas, gyms, etc., where the demographic is likely to prove profitable.

Whether Folkestone would undergo the transformation planned by Arena (on the back of an income generated by the sale of a sizeable chunk of acreage to housing developers), I haven't yet heard. It might be the Reubens would have other plans if they do buy up Arena. Unprofitable courses with little opportunity of expanding their non-racing business might find themselves also being redeveloped.

Even their Northern Racing arm may see some changes in time, too. Brighton r/c is leased from the Council, which has always retained an 18% interest, with that expiring in (I think) 2018. It currently looks almost as bad as it was pre-Stan Clarke's makeover in 1998/9. It needs a decent clean-up, re-paint and repair and the flowerbeds weeding more than anything seriously structural. There are problems with its expansion due to the new Green Council getting rather twee over Roman tumuli, where we used to park our cars (the far side of the course past the winning post), but the area occupied by the r/c buildings and car parks would be stunning real estate, with its views and prime position. Phil Bell, upgraded now to a directorship in NR and handing over the managing of the course to Hazel Glover (ex Bath), following the departure of this past season's manager, opined that he'd quite like to see the r/c relocated to another area on the Downs, a remark he would never be making off the cuff or out of turn. So, in a few years' time, who knows - the lease might run out and the Reubens not renew but offer to take the site off the Council's hands and provide it with a housing/amenity mix (which the area needs), and build a new course elsewhere.
 
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Unbelievably, the brothers have yet a further extension in which to reconsider their offer to shareholders - I understand it was 58p, while Trevor Hemmings is looking for 60p before saying 'yes'.
 
It's not yet on Arena's website, but there is a notification online tonight that Aldersgate, acting for the Reubens, has acquired Arena Leisure in total for cash, £167 million, 44.25p per share. Arena is recommending this offer to its shareholders and the deal requires final ratification in the High Court, but it would appear that the fourth extension of deadline, which ended at noon today, is the last.

This puts the Reubens in a monopoly position re the fixtures list, Arena already having the biggest share of that as is, which with the 15.5% they currently hold with Northern Racing, makes them by far the biggest racecourse operator in the UK. Of course, they will also get the non-racing interests of catering, leisure and hotel interests thrown into the mix with this acquisition. Arena, since dumping contract caterers a few years ago, offers catered events at its courses, from weddings to exhibitions, and has built up a number of onsite hotels offering leisure activities such as golf, spas, gymnasium memberships, etc.

I wouldn't be surprised to see a strong administrative restructuring take place - personally, in this age, it's surprised me that their courses aren't standardized in entry fees and all bookings for racedays, hotels, restaurants, etc. done through a large centralised service, thus doing away with top-heavy management. Same thing with their accounting systems, human resources, etc. No need for individual on-course managers at all if you are serious about maximizing technical resources efficiently.
 
You're not alone with that thought, cj. What I think they want, what they really, really want, is Doncaster, Royal Windsor, and Lingfield for the year-round fixtures and its dual turf/AW capacity. But they haven't been given the option to cherry-pick from Arena's portfolio (leaving it with the weaker venues) and have had to take a job lot. I think it's very much 'watch this space' to see which courses might be discarded from the pack in due course.
 
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