Rank Group makes another U-turn

27th Jun 2011 12:41

Mecca Bingo clubs operator Rank Group's board has recanted its decision to grudgingly recommend Guoco Group's bid, largely because of uncertainties about the continued stock exchange listing of Rank's shares.The Blue Square online betting firm owner said that Guoco will not provide an "unconditional commitment" to continue Rank's listing, or guarantee shareholders the 18-month period to sell their shares at a minimum of 150 pence a share. Rank said that should less than 25% of Rank shares remain in public hands, "Guoco Group intends to discuss with the FSA [Financial Services Authority] whether the free float is sufficient for Rank to remain as a listed company," or Guoco will explore ways to restore the percentage of public shares over a reasonable period of time, if commercially reasonable.On 8 June, Guoco said it controlled 56.4% of the issued share capital of Rank.Simply put, Rank's shareholders will not know before the closing date of Guoco's offer whether the listing of Rank shares will be maintained, and if Guoco decides to cancel Rank's listing then shareholders who have not accepted the offer by its closure will have no further opportunity to accept the offer. If Guoco, controlled by billionaire Quek Leng Chan, cancels Rank's listing, investors who still hold Rank's shares will not be protected by the listing rules and the ability to dispose of their Rank shares following closure of the Offer will be materially restricted.The decision to reject Guoco's offer represents a return to Rank's previous stance on the 150p-a-share offer, which it believes materially undervalues the company.Meanwhile, the Office of Fair trading has decided not to refer the proposed takeover to the Competition Commission.Investors remained unfazed by the announcement. Shares of the company were trading down 0.2% to 149.50p at noon. AR