UK-based gambling firm Rank is urging investors to reject a takeover bid by Malaysian-owned investment firm Guoco Group.
Earlier this month, Guoco, which has been a shareholder since 2007, increased its share in the leisure group by an additional 11.6 per cent at a price of 150p per share. This means the company now has a 40.8 per cent stake in Rank, which requires it to make a mandatory offer for the whole company.
Guoco has stated that its 150p per share offer, which values the company at approximately £580m, is final and will not be increased.
In a letter to shareholders, Rank’s chairman, Peter Johnson, appealed to investors not to sell their shares.
"Rank is at an important point in its strategic development with a clear strategy, a broad range of growth opportunities and the financial flexibility to invest in its businesses and deliver attractive returns to shareholders. As a result, we believe that Guoco Group’s offer does not recognise appropriate value in Rank and its exciting prospects," he said.
Johnson explained that the company’s independent directors believe the takeover bid "substantially undervalues" Rank and so would not be accepting Guoco’s offer in respect of their own shareholdings.
