Broker snap: Rank offer goes unconditional, Panmure Gordon disappointed

8th Jun 2011 12:46

Guoco's offer for casino and bingo hall operator Rank Group has gone unconditional, prompting Panmure Gordon to put its 'buy' rating and target price of 204p on Rank under review, saying that this is a very disappointing outcome.It was revealed today that Guoco's 150p per share offer has received additional 15.6% acceptances and has been declared as unconditional, as Guoco now owns 56.4% of the issued share capital."This is a very disappointing outcome but as we noted on 9 May whilst Guoco said this was not a hostile move, we failed to see how it could not be interpreted as one," said analyst James Cooke.The broker - and Rank itself - have previously said that the offer "significantly undervalues" the group. Panmure's take out estimate was around 248p per share."We note that the implied enterprise value of circa £524m does not even represent fair value for the casino division alone, which we value at £593m," Cooke said.---BC