Guoco wins majority stake in Rank

8th Jun 2011 15:14

Rank has revealed that the 150p per share offer for the company by Malaysian investment firm Guoco Group has been declared unconditional, just a month after Rank said that the price "significantly undervalues" the group.In May, the casino and bingo hall operator advised its shareholders against accepting the bid which valued the group at £586m. However, Guoco has said that it has received an additional 15.6% of acceptances and has been declared as unconditional, as it now owns 56.4% of the issued share capital of Rank."The board is carefully considering the situation. A further announcement will be made in due course. In the meantime, Rank shareholders are strongly advised to take no action," said Rank in response.According to Panmure Gordon analyst James Cooke, "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."Cooke notes that the "implied enterprise value of £524m" does not even represent fair value for Rank's casino division alone, which the broker thinks is worth £593m.---BC