LEISURE OPERATOR Rank Group is eyeing rival Gala Coral’s casinos business, in an estimated £250m deal that would make Rank the largest casinos operator in Britain.
Talks between the two parties are ongoing, although it is understood discussions to merge Rank’s 35 Grosvenor Casinos with Gala’s 24 gaming venues are at an early stage, with an announcement before Rank’s interim results on 9 February considered unlikely.
The takeover talks follow a programme of modernisation for Rank’s Grosvenor Casinos brand, the most profitable division at the leisure group that also owns Mecca Bingo, Top Rank Espana and online gaming company Rank Interactive.
Last year, Rank announced plans to expand the Grosvenor casino chain to 45 venues by the end of 2015, following strong financial results for the first half of last year.
Revenue for Grosvenor Casinos rose by 5.8 per cent to £123.4m for the six months to 30 June 2011, while operating profit rose by 14.8 per cent to £20.2m.
Gala Coral, meanwhile, was the subject of a major debt restructuring in 2010 and last month revealed it had net debt of £1.3bn. City observers believe a break-up of the business would allow chief executive Carl Leaver to focus on Gala Coral’s bingo and betting shop interests.
Last May, Rank was itself the subject of takeover speculation, when Guoco, the vehicle owned by the Malaysian tycoon Quek Leng Chan (left), finally took a 74.5 per cent stake in the company in July following a convoluted deal process.
Both Rank and Gala Coral declined to comment.