RANK Group yesterday walked away from plans to buy Gala Coral’s casino business after two months of discussions.
Rank, which operates its own casinos and owns Mecca Bingo, said the £250m acquisition “would not serve the best interests of [our] shareholders.”
But a spokesperson for Gala insisted the gambling company had not been for sale when Rank made an unsolicited approach, and said the group would continue to generate growth from its casinos.
Listed on the LSE but majority owned by Malaysian billionaire Quek Leng Chan, Rank operates 35 casinos under its Grosvenor division.
It announced on 30 January it was in discussions with Gala about buying its 24-strong group of casinos, which would have catapulted Rank to market leader, with 14 more casinos than current top dog Genting.
Chief executive Ian Burke said Rank will instead “concentrate on delivering our organic growth plans, including the delivery of 12 more G casinos, by 2015.” Rank’s range of G casinos are larger and flashier than the standard series.
Private equity-owned Gala Coral carries a significant debt burden and has been expected to make a sale since a debt restructuring in 2010 left many creditors with equity.
James Hollins, an analyst at Investec, said that Rank’s dismissal of the deal was a minor disappointment but the company was right to walk away.