Supplementary memorandum submitted by
Wembley National Stadium Limited
Letter to the Directors of Wembley National
Stadium Limited from Humberts Leisure (Chartered Surveyors and
Leisure Property Specialists), dated 7 April 2000
WEMBLEY
STADIUM
We refer to your written instructions to provide
an opinion of the current market value of the Stadium as at 15
March 1999.
We act for Wembley Plc and in the capacity of
their portfolio valuers, we provided the Directors with a valuation
report dated 14 April 1998, in which we confirmed an opinion of
value at £103 million.
Subsequently we were asked to provide a valuation
certificate for inclusion within a stock exchange circular. This
certificate confirmed our opinion of the value as at 31 December
1998 at £105,500,000.
This side letter should only be read in conjunction
with the above quoted report and certificate, so that the caveats
and conditions set out therein shall apply hereto, including the
basis of valuation which accords with the Royal Institution of
Chartered Surveyors Appraisal and Valuation Manual definition
of Open Market Value.
Without carrying out a further valuation, we
confirm that we are not aware of any matters that would cause
us to value the Stadium and related assets on the same basis of
valuation at a value different from £103,000,000 as at 15
March 1999.
We trust this letter is sufficient for your
purposes.
Extracts from a letter
to the Directors of the English National Stadium Development Company
Ltd (former name of WNSL) and the Trustees, ENST Limited, from
PricewaterhouseCoopers, dated 6 January 1998
"1. In accordance with the engagement
letter dated 20 January 1998 between the English National Stadium
Development Company Ltd ("ENSDC") and Coopers and Lybrand,
(as subsequently novated to PricewaterhouseCoopers,) and subsequent
discussions with you, we are writing with our opinion as to whether
the sum ("the Amount") that ENSDC has agreed with Wembley
plc and Wembley Stadium Limited ("WSL") to pay for the
rights to the freehold interest in, and business assets associated
with, operating Wembley Stadium ("the Wembley Stadium Business")
is fair and reasonable, having regard to the likely current market
value of the Wembley Stadium Business, and is financially neutral
to Wembley plc."
"7. The English Sports Council ("ESC")
has specified that any deal with Wembley plc should be "financially
neutral" to Wembley plc. We interpret this in the context
of this transaction to mean that on exchange of contracts the
value of the Amount payable to Wembley plc represents at that
date, no more than the stand-alone market value consideration
for the Wembley Stadium Business which Wembley plc are giving
up on the deal. We have defined market value at paragraph 8 below.
8. We have adopted market value as at 24
December 1998 as the basis of valuation. We define market value
as the estimated price which the Wembley Stadium Business might
reasonably be expected to fetch, in money or money's worth, in
a sale in the current market between a willing buyer and willing
seller, each of whom is deemed to be acting for self interest
and gain and both of whom are deemed to be equally well informed
about the business and the markets within which it operates."
"Opinion
21. Based upon the information currently
available to us, including the findings of the due diligence review
which we have specifically taken into account, and subject to
the limitations set out in this letter, it is our opinion that
the Amount payable of £106 million for the Wembley Stadium
Business as a going concern is within a range of reasonable market
values and thus is fair and reasonable. As the price is within
a range of reasonable market values we also consider that it is
financially neutral to Wembley plc as described in paragraph 7
above."
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