Rank Group Plc is once again at the centre of takeover speculation following reports of a bid from private equity group Duke Street Capital for the purchase of Rank’s Mecca Bingo.
According to the UK’s Sunday Times, Rank’s Chief Executive, Ian Burke, received a written proposal from Duke Street regarding the acquisition of the company’s bingo operation, however it is understood that Rank’s board of directors have rejected the proposal and that no talks are ongoing.
This latest bid follows an unsuccessful offer last month by America’s Harrah’s Entertainment Inc. to sell a significant portion of London Clubs International to Rank, in return for a 28% stake in the resulting enlarged Rank Group.
Malaysia’s Genting Group has also demonstrated an appetite for the casino and bingo operator, having recently accumulated a 10% shareholding in Rank which sparked speculation of a bidding war for the company, whose share value has plunged since an earnings warning in October.
Genting aggresively increased its share of the UK gambling market last year with £650 million worth of acquisitions, buying London’s Maxims Casino as well as casino operator, Stanley Leisure.
Many analysts have picked Rank Group plc as a stock to watch in 2008 as a result of the takeover interest, and the company’s current share price of 90 pence from a high earlier this year of 230 pence. The slump in share value has been as a result of reduced earnings following the introduction of the smoking ban in the UK this year, as well as removal of highly profitable gaming machines in accordance with the new Gambling Act which came into force in September.
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