Rank Ends Talks With Gala Coral

Rank Group, which operates Mecca bingo halls and Grosvenor Casinos throughout the UK, has backed away from recent talks with Gala Coral. Gala has extensive bingo, casino and bookmaking operations in the UK. Currently Gala operates 143 bingo clubs and has about five million bingo members, with 1.2 million regular players. The deal between Rank and Gala was reputed to be worth £250 million pounds. ($397,470,636.90 USD) The purchase would have changed the gaming landscape in Britain and would have made Rank the UK’s largest casino operator. The talks failed after two months of discussions and the companies could not reach an agreement on a price that would have been acceptable to Rank’s shareholders.

Currently the leading casino operator in the UK is Malaysian based Genting Group. Rank currently runs 34 casinos and if the company had added the 24 casinos owned by Gala Coral Rank would have been Great Britain’s largest casino operator. Rank’s CEO and chairman felt that ending the talks was the correct move for his organization. Rank’s CEO also said that the acquisition would not bring shareholders sustainable growth.

Gala Coral, which is owned by private equity, said that the breakdown in discussions was the inability of both parties to agree on the purchase price. The talks had been the subject of much discussion in financial and gaming circles. Gala which has a lot of debt was approached by Rank. Gala was originally created in 1997 as a spinoff of Bass and since then has been owned by several private equity owners. Gala’s primary shareholders include Cerberus, Apollo, York Capital Management, and Park Square. Since the talks failed Gala will be redirecting their efforts. Gala wants to refurbish the company’s website and revamp many of their casinos. Gala also has a major internet bingo operation. Gala will also focus on its bookmaking business.

The controlling interest in Rank, 74.5% is owned by Malaysian based Guoco. Rank is now focusing on further growth. Rank plans to open 12 additional casinos by 2015. Rank already operates 35 casinos and 103 bingo halls and has an extensive internet bingo operation. Rank has already remodeled some of its casinos to appeal to a younger casual crowd. The move has paid off handsomely for the company and Rank said it will continue to target nontraditional casino goers.