Burke and Chair surprise at Rank

4th Jul 2011 08:23

The Rank takeover saga continues, with bidder Guoco Group finally doing something the Rank board approves of with its new mechanism for the close of the offer, prompting Rank's former chief executive Ian Burke to get back on board.Burke, who resigned as chief executive of Rank last week, has rejoined the board as chief executive, and will become chairman and chief executive when the offer closes. As previously announced, chairman Peter Johnson is to step down from the Rank board.The statement from Rank could not resist having one more poke at the measly terms of the 150p per share offer from Guoco, but fractious relations between the two parties seem to be on the mend, with Rank saying it has received helpful assurances from Guoco Group regarding the operation of a listed Rank following the close of the offer."Rank shareholders now have a genuine choice between the potential future benefits of holding their shares in a listed Rank and the ability to receive 150p per share," the statement from the board said.The board's recommendation is that any shareholders who accepted the Guoco offer between 17 June and 1 July should rescind those acceptances and stick with Rank. As at 1pm on 1 July, Guoco had received acceptances of its offer representing around 44.9% of Rank's shares, giving it control of 80.8% of the company once notifications of withdrawal of acceptance are taken into account."Along with the board, I am excited about the future for Rank and providing all shareholders with the ability to benefit fully from the substantial opportunities for growth and value creation that are available to Rank. We believe that Rank is an excellent business with strong positions and trusted brands in fundamentally attractive markets. Now that certain risks and uncertainties have been removed, we do not believe that this is the right price at which to sell shares in Rank," Burke said.Under the revised terms of the Guoco offer, the offer period has been extended by 14 days to 15 July, and a 'get-out' clause has been added that could see the offer extended by seven days if Guoco ends up owning more than 75% of Rank's issued share capital. Meanwhile, Rank's directors seem a lot more comfortable about the prospects of life under the control of the Guoco Group, having received a number of assurances about Rank's future from the Malaysian investment firm.Guoco Group believes that there are a number of potentially attractive investment opportunities for Rank and the expansion of the business should be an important priority for management, while the continuation of regular dividends to Rank shareholders remains part of Guoco's plans.With an element of uncertainty removed from the 150p a share bid from Guoco, Rank's shares moved up a halfpenny in early trading to 150p.--jh