Rank’s Top Execs Quit

29/06/2011

The Rank Group now looks to be firmly in the hands of the Guoco Group following the resignations of the UK casino and leisure company’s chief executive and finance director.

Ian Burke and Paddy Gallagher, CEO and finance director respectively, are understood to have left Rank’s board of directors over the possibility that the takeover by Guoco could see the company’s shares de-listed if the latter wins more than 75 per cent of its shares.

The Malaysian-backed investment group won a controlling share in the company after upping its stake to 40.8 per cent in May with the acquisition of a further 11.6 per cent of shares and triggering a mandatory offer of 150p per share, which was accepted by shareholders owning around 15 per cent of the company.

That offer is due to expire on July 1, by which time the company may have acquired 75 per cent of Rank’s stock. Although Rank’s management has warned the offer undervalues the company, it reluctantly advised its shareholders last week to accept the offer or risk potentially losing out if Guoco receives sufficient acceptances to de-list the shares.

Guoco said on Friday that it intends for the listing of Rank shares on the London Stock Exchange to continue. If, as a result of the offer, 25 per cent of Rank remains in public hands, the company will discuss with the Financial Services Authority whether the ‘free float’ is sufficient for it to remain as a listed company. Should the FSA determine otherwise, Guoco said it would explore ways in which the necessary percentage of shares in public hands could be restored over a “reasonable” period of time.

However, now it seems that both Burke and Gallagher, in light of the possible level of acceptances of Guoco’s bid, believe the cancellation of Rank’s shares is now “more than likely.”

In a statement to the financial market, Rank’s board said it will be convening urgently to discuss the latest developments and will make a further announcement shortly.

By Simon Liddle, InterGaming

 

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