Rank Group Bowing to Pressure on £586m takeover by HK-based Guoco Group

Posted on June 24th, 2011

Rank has been trying to defend itself from a £586m buyout by Hong Kong-based Guoco Group. Yesterday- it effectively threw in the towel and advised shareholders to accept the last offer of 150p per share.

Goldman Sachs advised the company to accept the offer because it could not guarantee Guoco would not cancel the listing if shares in public hands fell below 25%. This could have resulted in a plumetting share price for the remaining shares in public hands.

Rank owns Mecca Bingo, GCasino and Blue Square. Guoco is run by by Malaysian billionaire and supreme tactician Quek Leng Chan.

Rank yesterday reported a 7% year-on-year rise in sales for Q2 with revenues from Rank Interactive up by 28%. The price target had been 185p per share.

UK institutional investors are not happy as the offer represents a premium of less than 1 per cent to its share price prior to the bid.

The Rank board said that while it believed the offer “undervalues the company”, there was a real risk that Guoco would take the company private if it won more than 75 per cent of shares, as it is allowed to do so under market rules.

That would leave the remaining shareholders with shares with a lower “liquidity and marketability”. ie- if you can´t sell ´em, they´re not worth a great deal.

Guoco bought 11 per cent of Rank from Genting of Malaysia, the company’s second-biggest shareholder which took Guoco’s holding to 41%, setting off a mandatory offer.

Guoco said it was fully behing Rank’s management and did not want to take the company private. “I’m gutted,” said one investor. “The company’s been whisked from under our feet, basically.”

Well, we always knew that Quek Leng Chan was a High Roller and master tactician. Looks like he hit the progressive jackpot on this one. I make that quite a tidy profit already if the deal goes ahead.

Related Posts

There's a New Strip: Vietnam First Mega Casino Opens

Well, we have reported on this previously- Vietnam wanting to open a casino complex that is. It seems that many Asian countries are piling on the bandwagon after the runaway success of Macau, and Vietnam was one of the...

The Best Online Roulette Games

We are going to take a look at roulette variants in this post. Most of the focus on game development in recent years has tended to be on slots, so it’s easy to forget that online roulette has also...
Happy Chinese New Year

Chinese New Year – The Year of The Goat

It’ll soon be time to say “Kung Hei Fat Choy”  (恭喜发财) in Hong Kong and  Xin Nian Kuai Le (新年快乐) in Shnaghai and Beijing. It’s Chinese New Year on February 19th. On February 20th we’ll be in Year of the...