UK casino and leisure company Rank could be taken private if Hong Kong-listed Guoco Group wins more than 75 per cent of its shares.
Rank’s management has maintained that Guoco’s 150p per share takeover undervalues the company but in a letter to shareholders on Thursday it warned that if the number of shares held in public hands falls below 25 per cent, the company may no longer be listed on the London Stock Exchange.
In the event that Guoco takes such action, shareholders who did not accept the company’s offer will own shares in an unlisted company, significantly reducing the "liquidity and marketability" of Rank shares not accepted into the offer.
Having increased its shareholding in Rank to 40.8 per cent with the acquisition of an additional 11.6 per cent stake in May, Guoco triggered a mandatory 150p per share offer for the remaining shares of the company.
Despite appeals from Rank management to reject the offer, shareholders owning around 15 per cent of the company accepted Guoco’s offer. Consequently, Guoco now controls just over 56 per cent of the company.
Rank’s board said it does not believe Guoco has received sufficient acceptances to seek the cancellation of the listing of the former’s shares but in a dramatic u-turn, it acknowledged that this may not be case when the offer for acceptances closes at 1pm on July 1 and urged shareholders to accept the offer.
