Select Committee on Culture, Media and Sport Minutes of Evidence

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


  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."


  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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