All bets off on bid for Rank

Elizabeth Fournier
BRITISH gambling company Rank Group has urged shareholders to turn down an offer from majority shareholder Guoco, after the Hong Kongbased group made a mandatory tender after increasing its stake to almost 41 per cent.

The offer is being presented by both sides as a regulatory formality to comply with UK takeover rules, which require an offer to be made once a shareholder crosses a 29.9 per cent threshold in a company.

Guoco, run by Malaysian billionaire Quek Leng Chan, has said that it is supportive of the incumbent Rank management, and that it is not seeking board representation or to increase its stake further.

The investment company has also said that its offer price of 150p per share is final, valuing Rank at £585m – just a 0.7 per cent premium to the Group’s closing price on Friday.

A source close to Rank, which owns Mecca Bingo and Grosvenor Casinos, said that there was no reason to believe Guoco’s intentions were anything other than stated, and that the offer period was expected to pass without a change in the tender.

Rank has long been the subject of takeover speculation, with expectations of a sale raised after it issued a profit warning in 2007, and again following the sale of its pension fund to Goldman Sachs in early 2008.

But the Group has so far resisted suitors, instead refocusing the business on its core gambling operations.