Rank confirms Gala Coral move on the cards
31 January 2012 10:03
Rank Group moved closer to the creation of the UK's biggest casino operator today after it confirmed talks over a deal with Gala Coral to add Gala's casino portfolio to its own.
Rank's Grosvenor division already has 35 casinos but hopes to extend this by adding the 24 outlets owned by debt-laden rival Gala Coral, overtaking Malaysia's Genting as the biggest firm in the sector.
If it goes ahead, the deal could be worth £250 million according to the Sunday Times, but Rank said no terms had been finalised and there was no certainty it would take place.
An acquisition would accelerate Rank's plans to have 45 Grosvenor outlets by the end of 2015 through the faster roll-out of its G-Casino format, which attracts a younger, less formal crowd. The business, which employs more than 3,000 people, has all but four of its casinos outside London.
A sale of the casinos would allow Gala Coral to concentrate on its Gala bingo and Coral bookmaking divisions, as well as strengthen its finances amid a net debt figure of £1.3 billion at the end of 2011.
The company has been seen as ripe for a break-up since a big debt restructuring in 2010 saw many lenders left with shares in the company, fuelling speculation that Rank would look to buy the casinos.
Rank is listed on the London Stock Exchange but majority owned by Guoco, the investment vehicle of Malaysian billionaire Quek Leng Chan.
The business also has more than 100 bingo clubs under the Mecca brand and owns the Blue Square sports betting and gaming business.
Malaysian firm Genting is currently the UK's biggest casino operator with 45 sites, including its flagship Crockfords casino in London's Mayfair.
The deal would give Rank an estimated 42% of the casino market in the UK but analysts said the lack of overlap between the two operations may help ease competition concerns.
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