Rank, Gala Coral Talks Break Down

Rank, Gala Coral Talks Break Down
Posted on 30 March 2012 Tags: bingo news, bingo sites, casinos, Gala Coral, internet bingo sites, Mecca internet, smoking ban, UK gaming According to recent news reports UK gaming giant Rank has pulled out of talks with Gala Coral. Rank was going to purchase Gala’s casino operations for £250 million, a deal which would have made Rank Great Britain’s largest casino operator. In addition to the brand’s Grosvenor casinos Rank operates the Mecca Bingo hall chain and the Mecca internet bingo site. After two long months of discussions between the two gaming operators Rank has pulled out after failing to agree on a price acceptable to the company’s shareholders. If Rank had added the 24 casinos owned by Gala to the 35 Grosvenor casinos Rank would pull ahead of current market leader Genting, a Malaysian based gaming company with 45 casinos in the UK. Rank is going ahead with ambitious plans to open 5 “G”, or larger style, casinos by 2015. James Hollins, an analyst at Investec, said that Rank’s decision was “minor disappointment” but added that Rank was “right to walk away.” Hollins went on to say “The announcement of these talks was made on 30 January and we had projected completion of the deal at a sensible price given Gala Coral’s desire to raise funds for paying down its material gross debt of £2.1bn at September 2011.” Gala Coral also said the price was the reason for the breakdown of the talks. At the time Rank approached Gala the company had no plans to sell their casino operations. In a statement Gala Coral said “Our casino business was not for sale when Rank made an unsolicited approach. Now that it is clear that a transaction on terms acceptable to our shareholders cannot be concluded, we are very happy to continue to drive growth from our casinos which are performing very strongly. These discussions have now ended after the parties failed to reach an agreement that was in the best interests of our shareholders.” Rank chairman Ian Burke told reporters that Rank is “committed to delivering sustainable growth in shareholder value; the proposed terms of the potential acquisition did not achieve this objective. We will now concentrate on delivering our organic growth plans, including the delivery of 12 more G casinos by 2015.” Rank is 74.5%-owned by Malaysian based Guoco, and operates 35 casinos and 103 bingo halls in the UK. Rank also operated the Mecca brand internet bingo site. Gala Coral will now focus on refurbishing some of the company’s casinos and their bingo operations. Gala also has an extensive internet bingo site which was launched shortly after the national smoking ban was imposed in 2005.

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