pounds 700m tag on bookie

Advisers to debt-laden leisure group Brent Walker have valued bookmakers William Hill at up to pounds 700m in the prelude to a possible flotation later this year.

The valuation, a marked rise from the pounds 400m-pounds 500m price tag put on the betting chain by analysts last year, follows a rapid recovery of William Hill's fortunes from its battering by the National Lottery.

Close Brothers, Brent Walker's merchant bank, is close to completing a review of William Hill's future, which favours an innovative plan to reverse the chain into the holding company.

Company sources stress that a sale or management buy-out have not been ruled out but, subject to Inland Revenue approval, the Close proposals would allow William Hill to use pounds 250m of tax losses accumulated by Brent Walker.

Potential bidders, however, including Bass, Rank, Ladbroke and Stanley Leisure, have so far baulked at the price demanded.

The 1,650-strong chain is all that remains of the leisure empire founded by ex-boxer George Walker, which crashed in 1991 with debts of pounds 1.6bn.

Last November, it sold its Pubmaster pubs chain for pounds 171m, but is still creaking under pounds 1bn of borrowings.

Mr Walker was acquitted of theft charges in 1994 and is still suing the group over unpaid debts.

Under the Close plan, banks led by Standard Chartered would also swap debt for equity in William Hill before a stock market flotation.

Sources say the betting chain now expects to make profits of pounds 65m this year, up from just pounds 38.7m previously following the introduction of the National Lottery.

Yesterday a Brent Walker spokesman said William Hill had gained strongly from the introduction of amusement machines and its new '49ers lottery game, but he played down any early resolution of the chain's future.

"No decision has yet been made. It's still up in the air. The board has not yet met to consider the (Close) report," he said.