Rank Group urges shareholders to reject offer

08/05/2011

Rank Group has urged its investors to reject a takeover bid of 150p a share from Asia based Guoco Group.

Guoco, run by Malaysian billionaire Quek Leng Chan, had owned 29.3 per cent of Rank’s shares until Friday when it increased its shareholding to 41 per cent.

A holding at that level triggers a mandatory cash offer to acquire the entire group. Guoco’s bid would represent a premium of less than 1 per cent to Rank’s closing share price of 148.8p on Friday in London.

It values the UK gaming group’s equity at £585.8m ($958.9m). The offer is final and will not be increased. “I fail to understand how that can be accepted by the board,” said Geetanjali Sharma, an analyst with Espirito Santo. “I don’t think they have a view of acquiring the company at this point.”

If this bid is not accepted, Guoco would be banned from making any new offer for the next year, unless a rival bid emerges or Rank’s board invites a new bid.

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