Genting moves to quell Rank concerns
By Roger Blitz, Leisure Industries Correspondent
Published: December 4 2007 02:00 Last updated: December 4 2007 02:00

Genting, the Malaysia-based owner of Stanley Leisure casinos, has made contact with Rank about its 9.4 per cent investment in the UK casino and bingo operator, claiming that its intentions are entirely "friendly", people close to the situation said yesterday.

Rank shares rose 8¾p to 109¼p yesterday as analysts predicted the stakebuilding heralded a possible bid for the struggling group.

Genting's holding in the group has risen from an initial stake of just under 3 per cent to its current level in one share transaction.

It follows an offer to Rank from Harrah's, the US operator that owns London Clubs International, to hand over its LCI casinos in return for a 28 per cent stake in the group. Rank rejected Harrah's approach.

Genting, which suffered a third-quarter loss because of writedowns at Stanley Leisure incurred from a hefty increase in casino tax, declined to comment on its position in Rank.

But one person close to the situation said contact with Rank was made from the Malaysian group, although little information was provided.

"The intention was to be friendly," the person said.

Rank insiders said management was expected to inform shareholders that it would request a meeting with Genting "at some point".

Insiders believe Genting is more interested in a strategic position in Rank rather than building a platform for a possible approach.

"An outright bid would be low down the list of potential outcomes," one Rank insider predicted.
Genting had in the past built up stakes in Stanley Leisure and LCI as a defensive strategy, but was effectively forced into an outright purchase of Stanley Leisure when Harrah's offered a knock-out bid to LCI's previous management.