Genting Stakes 10% in Rank Group
3rd December, 2007
Just a few hours after the market opened today, Rank Group London stock is up roughly 10% from its close on Friday. This is due to the recent stake Genting International has made in the struggling casino and bingo operator, making a whopping 10% investment.
Genting International, the gaming group owned by one of Malaysia’s richest families, bought Stanley Leisure last year, becoming the largest casino operator in the UK. Though it is currently unclear what Genting’s intentions are, close sources say the move is more likely to be for purposes of stake-building rather than the first step in a takeover. Other sources speculate the 10% stake is a blocking move to prevent a possible Rank takeover offer from Harrah’s, the American gaming giant which approached Rank last month, but was declined.
In recent months, Rank has become the target for takeover by many gaming industry giants. Due to the July 1st smoking ban, Rank’s land-based Mecca bingo clubs and Grosvenor casinos have struggled, causing them to issue a profit warning in October. Rank also had to deal with the recent tightening of regulations which limited the number of large jackpot slot machines.
Since the beginning of 2007, the stock has plummeted to less than 50% of its value, and leaving it with a market value of £392 million after closings on Friday. With any luck, the recent purchase by Genting should help start to turn the company around.
