Malaysian gambling firm Genting, have bought a 10 percent stake in casino-and-bingo operator Rank.

This move increases Genting’s standing as the UK’s biggest casino operator as it already owns Stanley Leisure and Kensington casino, Maxims.  The company is also well established in the Asian gambling market.

Genting plan to merge its already established British casino operations with Rank’s Grosvenor Casinos business.

There has been speculation about a takeover of Rank since November when it announced profits were to be lower than expected.  This was mainly due to the withdrawal of the section 21 machines and the smoking ban introduced in England and Wales.  The news of falling profits contributed to Rank’s shares falling to their lowest level in 7 years.

As well as Genting being a possible buyer of Rank, Harrah’s Entertainment, the owner of Caesar’s Palace casino in Las Vegas and one of the world’s largest gambling operators are also in the running.  Aspers, Ladbrokes and William Hill have also been reported as having in interest in buying Rank.  Singaporean company BIL are reported as also wanting to buy a stake in Rank and may want to take the company over as well.  Last year BIL bought London casino the Clermont Club from Rank.

However, one source has denied the rumours that Rank is going to be taken over.  “I don’t believe it will,” he said.  Rank has not been involved in any discussions involving a takeover, but is looking forward to having Genting as a shareholder.”

After Genting’s 10 percent stake in Rank though, analyst Ivor Jones of Evolution Securities said, “We believe this makes the takeover of Rank within the next 12 months more likely and we reiterate our buy recommendation.”

Rank holds 45 of the 143 casino licences in the UK making it an attractive buy for casino operators.

Ivor Jones states that Rank’s casino assets are more attractive to a buyer than its bingo operation.  He added, “Genting may be trying to create a situation where it buys the casino business from Rank.  At the right price, this could be a good deal for Rank shareholders.”

Genting’s 10 percent stake in Rank, has certainly done well for Rank’s shares as after the first day of trading since the announcement, Rank’s shares rose 8.75p to 109.25p.  

Print version