U-turn for Rank over Guoco’s hostile approach
RANK Group yesterday performed a screeching U-turn by endorsing Guoco’s hostile bid for the company.
The owner of the Mecca Bingo and Grosvenor Casino chains released a statement to the market saying it grudgingly recommended shareholders accept the bid despite the board maintaining it massively undervalues the company.
The decision is based on the increasing possibility of Guoco taking control of 75 per cent of Rank, at which point it is entitled to delist the company.
A source close to Rank said this would be “catastrophic” to shareholders and was the basis for reversed recommendation. The source told City A.M. any remaining shareholders would be left with “effectively worthless” shares which they would be unable to trade, should Guoco decide to delist the company.
Guoco, controlled by billionaire Quek Leng Chan, has signalled it will maintain the listing but would not rule out any possibilities.
The Rank board said yesterday’s taring update, in which it recorded a seven per cent gain in sales in the 10 weeks ended 19 June reinforced its claims that the 150p a share offer doesn’t reflect the true value of the group.