Rank Takeover Bid Rejected, Shares Rise

Rank Group has been a major player in the UK bingo market for years. Rank operates the well known Mecca chain of bingo halls across the country. Mecca is one of the oldest bingo brands in Great Britain. Recently Rank suffered a loss of revenue in its Spanish bingo halls after the Spanish government imposed a national smoking ban in January. Recently Rank was the subject of a takeover bid by Hong Kong based Guoco run by Malaysian born billionaire Quek Leng Chan. Recently Guoco acquired a 405 stake in Rank which trigged a mandatory takeover bid. Since Rank is quoted on stock exchanges the ownership of the company is determined by who owns the most shares. Rank is also a major player in the online bingo industry.

The acquisition of a 40% stake in Rank by Guoco is a mixed bag for players and investors. Once the 40% level has been reached the buyer must make an offer for all of the shares. In this case Guoco has offered 150 pence a share and the company values Rank at £586 million pounds. ($958,760,863.94 USD) The offer has been rejected and Rank says the bid undervalues the company. The recent actions have driven Rank shares higher and Rank shares are now valued at 151.6 pence. For players the interest in Rank is good news. The fact that investors are interested in the company means that they see the company as profitable and worthwhile so players can be assured they are playing bingo with a highly reputable company.

Internet bingo players at Mecca have no cause for alarm over the recent takeover bid. The management has reassured players that games will continue as usual and that all of the bingo bonuses and player perks will remain in place. Mecca entered the internet bingo industry after the national smoking ban in 2007 caused a dramatic drop in attendance at its land based bingo halls. Things must be looking up for Rank because recently Rank announced they are investing several million pounds to update some of their bingo clubs. Rank also won a sizable settlement from the UK government over a tax issue which sent Rank shares higher.

The current conclusion of many is that for now Guoco is content to be a large stockholder in Rank Group and at least one analyst said that Rank and its investors should reject the takeover offer.