An ambitious £3.4bn bid for William Hill has collapsed after the bookmaker refused to open talks with suitors Rank Group and 888 over what would have been a highly-complex, three-way deal.
Rank, the owner of Grosvenor casino and Mecca bingo halls, and online gambling company 888 made two offers for the bookie, of 394p-a-share and 364p, but both were dismissed by William Hill as too low and “highly opportunistic”. In the light of William Hill’s refusal to engage, the pair have dropped their approach, which had been dogged all along by stock market scepticism the deal was too complicated to pull-off and required too much debt.
A Takeover Panel deadline requiring the bidders to make a formal offer or walk away was due to expire on Sunday.
“We strongly believe that the transaction would have created significant value for all three sets of shareholders,” said Henry Birch, the boss of Rank. Itai Freiberger, 888’s chief executive, added that he was “disappointed” William Hill “did not share our vision”.
The mooted deal would have involved Rank merging with 888 to buy the bookie. Mr Birch would not comment on whether a deal between the two bidders was still on the cards, although he did say that “we’ve enjoyed working with 888”.
William Hill had publicly clashed with the bidders and disputed the value of the offers they had submitted. Gareth Davis, the bookie’s chief executive, said today that it would focus on its stand-alone turnaround strategy, adding that Rank and 888’s offer “fell down on value, risk, strategy and leverage”.
In a fillip to investors, he also said the company had enjoyed a “good start” to the second-half of the year and that annual operating profits were now expected to be at the top end of the £260m to £280m range.
However, William Hill remains isolated. Rivals Ladbrokes and Corals are merging and Paddy Power and Betfair have combined to create a gambling giant.
There has been speculation that CVC, the private equity giant that used to own William Hill and now owns Sky Bet, could make a bid for the bookie. But Berenberg analysts said today that they doubted William Hill would draw another suitor, arguing that “a private equity fund would need to re-leverage” the company “very substantially”.
William Hill shares, which had faded in recent days amid speculation a deal would fail, fell a further 4.7p to 303.1p. 888 rose 4.75p to 205p and Rank slid 2.3p to 221.6p.
Showing posts with label Rank. Show all posts
Showing posts with label Rank. Show all posts
August 19, 2016
July 26, 2016
William Hill is lukewarm on ambitious three-way merger deal
William Hill has fired a shot across the bows of suitors Rank Group and 888 amid scepticism that the pair would be able to pull off an ambitious three-way tie-up with Britain’s biggest bookmaker.
Rank, the operator of Grosvenor casinos and Mecca bingo halls, and online gambling business 888 are eyeing a consortium approach for struggling William Hill, in what would mark the latest deal to shake-up the gambling industry.
The potential bid leaked at the weekend, forcing the high street bookie to confirm today that it had received “a highly preliminary approach” that did not set out price or other terms.
William Hill said it would “listen to and consider any proposal which might be forthcoming”, but it also warned that it was “not clear” that a tie-up with Rank and 888 would “enhance” its “strategic position or deliver superior value”.
Analysts were similarly cautious about the prospects for a deal, given the complexity of a consortium bid. William Hill shares initially leapt as much as 12.8pc but only closed up 4.8pc at 328.8p as investors tempered their excitement about a tie-up as the day wore on.
Simon French, an analyst at stockbroker Cenkos, warned that “it is not immediately apparent” that 888 and Rank have the “skill set” to revive William Hill’s troubled online sportsbook or its estate of about 2,300 betting shops.
Meanwhile, Davy analysts said that “questions relating to funding would need to be answered” because, even combined, 888 and Rank are still much smaller than the high street bookie.
While a deal between William Hill and 888 makes sense and a takeover was attempted by the former last year, the Davy analysts were more sceptical about the “strategic rationale” of combining a betting shop business with a casino and gambling operator like Rank.
Both 888 and Rank have dominant shareholders - the Shaked brothers at the former and Malaysian billionaire Quek Leng Chan at the latter – which analysts said further complicates a deal and could make a merger unattractive to Hill’s investors.
Under Takeover Panel rules, 888 and Rank have until August 21 to make a formal offer or walk away. It is possible that William Hill, left vulnerable after its board ousted under-performing chief executive James Henderson last week, now attracts a rival bidder.
888 shares rose 3.4pc and Rank slipped 0.5pc.
Britain's gambling industry is in the midst of consolidation, with Paddy Power and Betfair completing a merger earlier this year and Ladbrokes and Coral in the midst of securing regulatory approval for a tie-up.
The Competition and Markets Authority is expected to publish its final report into the Ladbrokes-Coral deal tomorrow. In May, it provisionally recommended they sell as many as 400 betting shops to assuage concerns about competition.
Rank, the operator of Grosvenor casinos and Mecca bingo halls, and online gambling business 888 are eyeing a consortium approach for struggling William Hill, in what would mark the latest deal to shake-up the gambling industry.
The potential bid leaked at the weekend, forcing the high street bookie to confirm today that it had received “a highly preliminary approach” that did not set out price or other terms.
William Hill said it would “listen to and consider any proposal which might be forthcoming”, but it also warned that it was “not clear” that a tie-up with Rank and 888 would “enhance” its “strategic position or deliver superior value”.
Analysts were similarly cautious about the prospects for a deal, given the complexity of a consortium bid. William Hill shares initially leapt as much as 12.8pc but only closed up 4.8pc at 328.8p as investors tempered their excitement about a tie-up as the day wore on.
Simon French, an analyst at stockbroker Cenkos, warned that “it is not immediately apparent” that 888 and Rank have the “skill set” to revive William Hill’s troubled online sportsbook or its estate of about 2,300 betting shops.
Meanwhile, Davy analysts said that “questions relating to funding would need to be answered” because, even combined, 888 and Rank are still much smaller than the high street bookie.
While a deal between William Hill and 888 makes sense and a takeover was attempted by the former last year, the Davy analysts were more sceptical about the “strategic rationale” of combining a betting shop business with a casino and gambling operator like Rank.
Both 888 and Rank have dominant shareholders - the Shaked brothers at the former and Malaysian billionaire Quek Leng Chan at the latter – which analysts said further complicates a deal and could make a merger unattractive to Hill’s investors.
Under Takeover Panel rules, 888 and Rank have until August 21 to make a formal offer or walk away. It is possible that William Hill, left vulnerable after its board ousted under-performing chief executive James Henderson last week, now attracts a rival bidder.
888 shares rose 3.4pc and Rank slipped 0.5pc.
Britain's gambling industry is in the midst of consolidation, with Paddy Power and Betfair completing a merger earlier this year and Ladbrokes and Coral in the midst of securing regulatory approval for a tie-up.
The Competition and Markets Authority is expected to publish its final report into the Ladbrokes-Coral deal tomorrow. In May, it provisionally recommended they sell as many as 400 betting shops to assuage concerns about competition.
March 07, 2013
Rank agrees £179 million buyout of Gala Casinos
The Rank Group have announced an agreement to purchase 19 casinos of the 23 from Gala Coral Group for £179 million.
Rank said that Gala Coral’s casinos in Aberdeen, Bristol, Cardiff, Stockton-On-Tees and Gibraltar, its non-operating licences for the City of Westminster, London, and Dundee, its branded online casino activities and all of the central management functions previously associated with Gala Coral’s casino business are not included in the acquisition.
Rank also confirmed that the transfer of the Gala workforce for those casinos totaling 2,200 would be part of the agreement, at present ensuring there is no redundancies; however in the long term that situation is unsure.
In May 2012, Rank announced that it had conditionally agreed to acquire Gala Casinos from Gala Coral. That conditional agreement envisaged Rank purchasing 23 casinos and three non-operating casino licences. However the Office of Fair Trading referred the Proposed Acquisition to the Competition Commission for an in-depth merger review and, as a result, the original agreement lapsed. In February 2013, the Competition Commission published its final report following its review of the Proposed Acquisition. That report recommended the revised number that Rank could purchase without opposition.
The deal is expected to be completed in the second quarter of 2013.
Rank said that Gala Coral’s casinos in Aberdeen, Bristol, Cardiff, Stockton-On-Tees and Gibraltar, its non-operating licences for the City of Westminster, London, and Dundee, its branded online casino activities and all of the central management functions previously associated with Gala Coral’s casino business are not included in the acquisition.
Rank also confirmed that the transfer of the Gala workforce for those casinos totaling 2,200 would be part of the agreement, at present ensuring there is no redundancies; however in the long term that situation is unsure.
In May 2012, Rank announced that it had conditionally agreed to acquire Gala Casinos from Gala Coral. That conditional agreement envisaged Rank purchasing 23 casinos and three non-operating casino licences. However the Office of Fair Trading referred the Proposed Acquisition to the Competition Commission for an in-depth merger review and, as a result, the original agreement lapsed. In February 2013, the Competition Commission published its final report following its review of the Proposed Acquisition. That report recommended the revised number that Rank could purchase without opposition.
The deal is expected to be completed in the second quarter of 2013.
December 20, 2012
Rank may have to sell for Gala deal to proceed
The Rank Group, whom own the Grosvenor Casinos business could be required to find buyers for a number of casinos, or be prohibited from buying these casinos, before its acquisition of Gala Casinos Limited (Gala) can go ahead, after the Competition Commission (CC) provisionally found that the merger could damage competition in six areas of the UK.
In May 2012, Rank announced a deal to acquire from Gala 23 casinos and three ‘cold’ licences (where the operator holds the right to operate a casino in a particular area but does not currently have an operating casino there). The Office of Fair Trading (OFT) referred the case to the CC in August, and although the deal subsequently lapsed, the parties have confirmed that they are still pursuing the merger. Rank and Gala are two of the three large national casino operators in the UK. Following the merger, there would be only two large national casino operators, Rank and Genting.
In its provisional findings published today, the CC has identified five areas where customers could suffer from a substantial lessening of competition (SLC) as a result of Rank taking ownership of previously competing casinos. The five areas are Aberdeen, Liverpool/New Brighton, Stockton-on-Tees, Bristol and Cardiff. In addition the CC has identified an SLC in one area (Edinburgh) where Rank holds a cold licence which would likely be developed into a competing casino in the absence of the merger.
The CC has also found that casinos compete mainly at a local level for customers, particularly on elements such as customer service and promotions.
As well as the provisional findings, the CC has published a notice of possible remedies, which sets out ways in which the CC might address the loss of competition in the areas concerned. The options identified include requiring Rank to find buyers for casinos in the five areas identified-as well as for the Edinburgh cold licence-before being allowed to com-plete the deal. The notice also includes the possibility of the casinos in affected areas being excluded from the transaction or the whole deal being blocked.
Chairman of the Rank/Gala Inquiry Group and CC Deputy Chairman, Professor Martin Cave said:
‘We have found that casinos vary their offer in response to local competitive conditions and while there is limited scope to compete on price, casinos try to attract customers through customer service, promotions, events and the range of games available.
‘Our concern is that with two of the national players merging, this will leave a number of areas with much reduced competition where casino customers could consequently lose out through a poorer casino offer.
‘We are now going to look at the most effective way to preserve competition in these areas and whether this can be achieved in a way that allows an amended version of the deal to go ahead.’
The CC is expected to publish its final report by 20 February 2013.
In May 2012, Rank announced a deal to acquire from Gala 23 casinos and three ‘cold’ licences (where the operator holds the right to operate a casino in a particular area but does not currently have an operating casino there). The Office of Fair Trading (OFT) referred the case to the CC in August, and although the deal subsequently lapsed, the parties have confirmed that they are still pursuing the merger. Rank and Gala are two of the three large national casino operators in the UK. Following the merger, there would be only two large national casino operators, Rank and Genting.
In its provisional findings published today, the CC has identified five areas where customers could suffer from a substantial lessening of competition (SLC) as a result of Rank taking ownership of previously competing casinos. The five areas are Aberdeen, Liverpool/New Brighton, Stockton-on-Tees, Bristol and Cardiff. In addition the CC has identified an SLC in one area (Edinburgh) where Rank holds a cold licence which would likely be developed into a competing casino in the absence of the merger.
The CC has also found that casinos compete mainly at a local level for customers, particularly on elements such as customer service and promotions.
As well as the provisional findings, the CC has published a notice of possible remedies, which sets out ways in which the CC might address the loss of competition in the areas concerned. The options identified include requiring Rank to find buyers for casinos in the five areas identified-as well as for the Edinburgh cold licence-before being allowed to com-plete the deal. The notice also includes the possibility of the casinos in affected areas being excluded from the transaction or the whole deal being blocked.
Chairman of the Rank/Gala Inquiry Group and CC Deputy Chairman, Professor Martin Cave said:
‘We have found that casinos vary their offer in response to local competitive conditions and while there is limited scope to compete on price, casinos try to attract customers through customer service, promotions, events and the range of games available.
‘Our concern is that with two of the national players merging, this will leave a number of areas with much reduced competition where casino customers could consequently lose out through a poorer casino offer.
‘We are now going to look at the most effective way to preserve competition in these areas and whether this can be achieved in a way that allows an amended version of the deal to go ahead.’
The CC is expected to publish its final report by 20 February 2013.
August 21, 2012
Rank purchase of Gala Casinos delayed
The purchase of Gala Casinos by the Rank Group has hit a delay as The Office of Fair Trading has referred the acquisition to the Competition Commission for further investigation. It was believed that the OFT would rubber stamp the deal and the purchase could go ahead in the 4th Quarter of the year.
However the OFT says due to its concerns that the merger will substantially reduce competition in the casino sector it has now referred the deal to the Competitions Commission which is expected to report back in early February.
The OFT’s investigation found that Rank and Gala are two of the three large national casino operators in the UK.
Following the merger, there would be only two large national casino operators, Rank and Genting.
The OFT is concerned that the merger would reduce competition both at a national level and in nine local areas.
A reduction in competition in the casino sector could result in a worse deal for consumers.
Additionally, the OFT found that there are high barriers to entry and expansion in the casino sector due, among other things, to the licensing regime, which would severely limit the ability of third parties to enter or expand to replace the loss of competition caused by the merger.
Given the realistic prospect of this merger resulting in a substantial lessening of competition, the OFT considers it appropriate to refer the merger to the Competition Commission for an in-depth review.
Rank offered to provide undertakings in lieu of reference to the Competition Commission, including the divestment of casinos in a number of local areas.
The OFT welcomes the parties’ willingness to resolve the concerns in local areas, however, the undertakings were not considered sufficiently clear-cut to address all of the concerns raised by this merger.
OFT senior director, and decision maker in this case, Ali Nikpay, said: “Rank and Gala are two of only three large national casino operators in the UK.
“This merger would represent a major consolidation which could be expected to reduce competition, both locally and nationally. The high barriers to entry and expansion in the casino sector mean the loss of competition could potentially be irreversible.
“As such, we believe it is appropriate that the Competition Commission reviews this merger in detail to ensure that the interests of consumers are protected.”
Rank is considering the implications of the Office of Fair Trading’s decision to refer the company’s proposed acquisition of Gala Casinos to the Competition Commission, Rank says a further announcement will be made in due course regarding the decision.
However the OFT says due to its concerns that the merger will substantially reduce competition in the casino sector it has now referred the deal to the Competitions Commission which is expected to report back in early February.
The OFT’s investigation found that Rank and Gala are two of the three large national casino operators in the UK.
Following the merger, there would be only two large national casino operators, Rank and Genting.
The OFT is concerned that the merger would reduce competition both at a national level and in nine local areas.
A reduction in competition in the casino sector could result in a worse deal for consumers.
Additionally, the OFT found that there are high barriers to entry and expansion in the casino sector due, among other things, to the licensing regime, which would severely limit the ability of third parties to enter or expand to replace the loss of competition caused by the merger.
Given the realistic prospect of this merger resulting in a substantial lessening of competition, the OFT considers it appropriate to refer the merger to the Competition Commission for an in-depth review.
Rank offered to provide undertakings in lieu of reference to the Competition Commission, including the divestment of casinos in a number of local areas.
The OFT welcomes the parties’ willingness to resolve the concerns in local areas, however, the undertakings were not considered sufficiently clear-cut to address all of the concerns raised by this merger.
OFT senior director, and decision maker in this case, Ali Nikpay, said: “Rank and Gala are two of only three large national casino operators in the UK.
“This merger would represent a major consolidation which could be expected to reduce competition, both locally and nationally. The high barriers to entry and expansion in the casino sector mean the loss of competition could potentially be irreversible.
“As such, we believe it is appropriate that the Competition Commission reviews this merger in detail to ensure that the interests of consumers are protected.”
Rank is considering the implications of the Office of Fair Trading’s decision to refer the company’s proposed acquisition of Gala Casinos to the Competition Commission, Rank says a further announcement will be made in due course regarding the decision.
May 22, 2012
Rank deal will not cannibalize the UK casino biz
Following Rank’s deal to acquire a number of Gala’s casinos last weekend it was interesting to try and work out why the deal was being done.
It was talking to my grandmother I discovered Rank’s entertainment business career started far away from the casino in the salubrious surroundings of the local cinema. Post-war times were obviously very different and back then the cinema was likely a lucrative way to make some money through entertainment. Rank’s latest deal shows they mean business in an industry that, although the critics don’t like to say so, is just as deserving of the “entertainment” tag as any other. Big changes have been afoot in the U.K. based casino industry for some time and last weekend the straw broke the camel’s back as Rank decided to enough was enough and they wanted the market all for themselves.
Things have hotted up ever since Aspers spent big to open the continent’s largest casino and there will be some that think Rank’s hand was forced by the opening of such a lavish venue. The £250 million deal means Rank has another 23 venues in their vast catalogue of casinos, taking them to a total 58 venues in the UK. There haven’t been alarm bells ringing around this deal and even the analysts have kept quiet so why is this the case?
In a lot of industries this would be seen as a prime opportunity to consolidate. Casino companies see it completely the other way though and you only have to look at Rank’s future plans. Organic growth was already proposed with 25 new locations earmarked to see a Rank casino by 2015. This remains unaffected and there is no sense that expansion is simply being done to put others off. There’s a general feeling at Rank that if one casino firm sees visitors go up the others will also see the benefits.
While the above is definitely the case in an urban centre like London, Birmingham or Manchester, it’s when you look further afield that you start to think this isn’t the case everywhere. The best way to illustrate this is to look at Wales’ second city Swansea where Aspers have just this week started a consultation that could eventually see the shuttering of the venue. It’s no coincidence that a Grosvenor Casino is already there and demand in a place like this has seen to its demise.
So while it’s all well and good there being multiple casinos in some cities others just can’t sustain more than one and it goes to dispel the myth that they’re all there to help each other. What the move won’t do is close Gala venues and jobs wise that is definitely some good news for a country that is still deep in recession.
For Rank this eliminates the one large-scale competitor they had and gives them a free run at the industry. The only problem that will come for them is the larger Aspers casinos in a small number of locations and independent casino that will still be a staple of some towns. Then they could find themselves in same place that Aspers found itself in Swansea although the amount of venues they possess would offset it.
Rank deciding to acquire Gala Casinos is a good thing. No jobs are likely to be lost, no venues are being shut and it will only give the casino industry a better reputation as an entertainment venue to trust.
It was talking to my grandmother I discovered Rank’s entertainment business career started far away from the casino in the salubrious surroundings of the local cinema. Post-war times were obviously very different and back then the cinema was likely a lucrative way to make some money through entertainment. Rank’s latest deal shows they mean business in an industry that, although the critics don’t like to say so, is just as deserving of the “entertainment” tag as any other. Big changes have been afoot in the U.K. based casino industry for some time and last weekend the straw broke the camel’s back as Rank decided to enough was enough and they wanted the market all for themselves.
Things have hotted up ever since Aspers spent big to open the continent’s largest casino and there will be some that think Rank’s hand was forced by the opening of such a lavish venue. The £250 million deal means Rank has another 23 venues in their vast catalogue of casinos, taking them to a total 58 venues in the UK. There haven’t been alarm bells ringing around this deal and even the analysts have kept quiet so why is this the case?
In a lot of industries this would be seen as a prime opportunity to consolidate. Casino companies see it completely the other way though and you only have to look at Rank’s future plans. Organic growth was already proposed with 25 new locations earmarked to see a Rank casino by 2015. This remains unaffected and there is no sense that expansion is simply being done to put others off. There’s a general feeling at Rank that if one casino firm sees visitors go up the others will also see the benefits.
While the above is definitely the case in an urban centre like London, Birmingham or Manchester, it’s when you look further afield that you start to think this isn’t the case everywhere. The best way to illustrate this is to look at Wales’ second city Swansea where Aspers have just this week started a consultation that could eventually see the shuttering of the venue. It’s no coincidence that a Grosvenor Casino is already there and demand in a place like this has seen to its demise.
So while it’s all well and good there being multiple casinos in some cities others just can’t sustain more than one and it goes to dispel the myth that they’re all there to help each other. What the move won’t do is close Gala venues and jobs wise that is definitely some good news for a country that is still deep in recession.
For Rank this eliminates the one large-scale competitor they had and gives them a free run at the industry. The only problem that will come for them is the larger Aspers casinos in a small number of locations and independent casino that will still be a staple of some towns. Then they could find themselves in same place that Aspers found itself in Swansea although the amount of venues they possess would offset it.
Rank deciding to acquire Gala Casinos is a good thing. No jobs are likely to be lost, no venues are being shut and it will only give the casino industry a better reputation as an entertainment venue to trust.
May 14, 2012
Gala sell Casinos to Rank for £205m
Gala & Rank concluded the deal – which includes the sale of 23 UK-based casinos and three non-operating licences to Rank – over the weekend.
Rank, which is 74.5pc-controlled by Malaysia’s Guoco Group, will become the country’s leading casino operator once the deal completes in September, which is needed to pass the approval of the Office of Fair Trading (OFT).
The takeover of the casinos is conditional on approval by Rank’s shareholders and the receipt of UK merger control clearance.
Gala Coral, which has been through a tough financial restructuring, said it had not taken a final decision on what to do with cash from the sale, although it expects to “reduce the group’s leverage”.
“This transaction will crystallise significant value for our shareholders and debt investors,” said Carl Leaver, chief executive of Gala Coral, which is controlled by a largely private equity shareholder base comprising of 21 different investors.
The deal excludes Gala Coral’s casinos in Dundee and Gibraltar and also the casino freehold properties owned by Gala’s property vehicle. Under Rank’s ownership, Gala’s former casinos will remain the tenants of the freehold properties.
Rank has made no secret of its interest in buying Gala Casinos, but announced on March 29 that earlier talks were off after it balked at the “proposed terms”. The talks resumed last week after the previous discussions broke down over lease agreements, this has now been overcome and Rank will look forward later this year once the OFT agree to be the biggest UK Operator ahead of Genting.
Rank, which is 74.5pc-controlled by Malaysia’s Guoco Group, will become the country’s leading casino operator once the deal completes in September, which is needed to pass the approval of the Office of Fair Trading (OFT).
The takeover of the casinos is conditional on approval by Rank’s shareholders and the receipt of UK merger control clearance.
Gala Coral, which has been through a tough financial restructuring, said it had not taken a final decision on what to do with cash from the sale, although it expects to “reduce the group’s leverage”.
“This transaction will crystallise significant value for our shareholders and debt investors,” said Carl Leaver, chief executive of Gala Coral, which is controlled by a largely private equity shareholder base comprising of 21 different investors.
The deal excludes Gala Coral’s casinos in Dundee and Gibraltar and also the casino freehold properties owned by Gala’s property vehicle. Under Rank’s ownership, Gala’s former casinos will remain the tenants of the freehold properties.
Rank has made no secret of its interest in buying Gala Casinos, but announced on March 29 that earlier talks were off after it balked at the “proposed terms”. The talks resumed last week after the previous discussions broke down over lease agreements, this has now been overcome and Rank will look forward later this year once the OFT agree to be the biggest UK Operator ahead of Genting.
March 19, 2012
Rank & Gala Coral deal
Rank in late January confirmed it is in discussions with Gala Coral over the possible acquisition of Gala’s casino business. The deal would make Rank, which owns the Grosvenor Casino and Mecca Bingo chains, Britain’s biggest casino operator. However it has been now several weeks and no deal has yet been announced.
Rank’s confirmation came after the Sunday Times reported that it was in advanced discussions to acquire Gala Casinos for £250m. The deal would see Rank, which is 74% owned by Malaysian-based gambling group Guoco, merge its 35 Grosvenor Casinos chain with the 24 casinos owned by Gala.
While Rank doing the deal would expect that there could be some competition issues and it may take time to deliver synergies, the deal would make sense financially and strategically for Rank.
A break-up of Gala, has been on the cards ever since the company became embroiled in a complex debt restructuring in 2010. In December it disclosed it had net debts of £1.3bn.
Rank has long been mooted as a possible buyer of Gala casinos for quite a long time, though acquisitions were temporarily put on hold last year when it was itself controversially purchased by its biggest shareholder – Malaysia’s Guoco.
However now the dust has settled on Rank, Buying Gala’s casinos would accelerate the plans of Ian Burke, Rank’s executive chairman, to expand the gaming group’s Grosvenor chain to 45 venues by 2015.
Ian Burke is already converting many of the Grosvenor outlets to a new G Casino brand, the first of which was rolled out in Manchester in 2006, aimed at attracting a younger clientele.
Selling the casino wing would help Gala strengthen its balance sheet – but could also herald further break-up of the group, which is run by chief executive Carl Leaver, the former head of Marks & Spencer’s international arm.
So why the delay in announcing the deal has been done?
One reason certainly is the logistics of some of Gala Casinos would have to close should Rank buy them, the operator would not want to have two or even three casinos in one town. Either closure and redundancies or possibly a sell on to Genting of those properties or another buyer, could be delaying the deal.
The possibility of the competitions rule could be another and finally the asking price from Gala Coral. Although what is believed to be £250 million, is not that expensive as analysts have already indicated.
Whenever the deal is announced and certainly will be, the UK will see the emergence of the biggest casino operator, called Grosvenor Casinos.
Rank’s confirmation came after the Sunday Times reported that it was in advanced discussions to acquire Gala Casinos for £250m. The deal would see Rank, which is 74% owned by Malaysian-based gambling group Guoco, merge its 35 Grosvenor Casinos chain with the 24 casinos owned by Gala.
While Rank doing the deal would expect that there could be some competition issues and it may take time to deliver synergies, the deal would make sense financially and strategically for Rank.
A break-up of Gala, has been on the cards ever since the company became embroiled in a complex debt restructuring in 2010. In December it disclosed it had net debts of £1.3bn.
Rank has long been mooted as a possible buyer of Gala casinos for quite a long time, though acquisitions were temporarily put on hold last year when it was itself controversially purchased by its biggest shareholder – Malaysia’s Guoco.
However now the dust has settled on Rank, Buying Gala’s casinos would accelerate the plans of Ian Burke, Rank’s executive chairman, to expand the gaming group’s Grosvenor chain to 45 venues by 2015.
Ian Burke is already converting many of the Grosvenor outlets to a new G Casino brand, the first of which was rolled out in Manchester in 2006, aimed at attracting a younger clientele.
Selling the casino wing would help Gala strengthen its balance sheet – but could also herald further break-up of the group, which is run by chief executive Carl Leaver, the former head of Marks & Spencer’s international arm.
So why the delay in announcing the deal has been done?
One reason certainly is the logistics of some of Gala Casinos would have to close should Rank buy them, the operator would not want to have two or even three casinos in one town. Either closure and redundancies or possibly a sell on to Genting of those properties or another buyer, could be delaying the deal.
The possibility of the competitions rule could be another and finally the asking price from Gala Coral. Although what is believed to be £250 million, is not that expensive as analysts have already indicated.
Whenever the deal is announced and certainly will be, the UK will see the emergence of the biggest casino operator, called Grosvenor Casinos.
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