Guoco holding reveals possible suitor for troubled Rank Group
By Roger Blitz, Leisure Industries Correspondent
Published: January 12 2008 02:00 Last updated: January 12 2008 02:00

Rank Group is in the sights of another potential buyer after the Asia-based Guoco Group became the latest investor to declare a sizeable stake in the casino and bingo operator.

Guoco, an investment group that bought the Clermont Club in London's Berkeley Square from Rank in 2006 for £31m, has built a 3.17 per cent stake, Rank said in a regulatory statement.

Guoco's holding follows Rank's disclosure last month that Genting, the Malaysia-based gaming operator and owner of Stanley Leisure, had acquired a 10 per cent stake.

The Richardson family, whose businesses are in property and haulage, are believed to have taken a stake of about 9 per cent in in the company through contracts for difference via an equity investment arm.

Rank has been the subject of bid speculation since the autumn when the impact of the smoking ban and the loss of gaming machines led to a profit warning and a collapse in its share price.

Guoco, run by Quek Leng Chan, has struggled to make an impact in the UK casino market. BIL, its subsidiary, made substantial losses in the first six months of its Clermont ownership and has won only four out of 19 licence applications to build casinos, mainly within its Thistle hotel chain.

Guoco's holding brings Ian Burke, Rank's chief executive, back into contact with his former employer. Mr Burke was chief executive of Thistle in 2003 when BIL moved from being Thistle's biggest shareholder to buying the company outright.

Rank has been linked to a raft of potential suitors, including US operator Harrah's, as well as Ladbrokes, William Hill and Aspers.

Rank announced last month it was scrapping its full-year dividend and scaled down on capital spending plans. Its shares have fallen about 35 per cent in the past three months.

Yesterday Rank shares rose 1¾p to 85½p.

Source