Investor fury over Guoco’s Rank offer
SHAREHOLDERS in gaming group Rank are considering launching a complaint to the Takeover Panel over Hong Kong-listed Guoco’s approach for the firm.
At least two institutional investors are understood to be concerned that some exiting shareholders have connections with Guoco and could have been acting in concert over the offer, which analysts say significantly under-values the firm.
A source close to the bid told City A.M. some investors were considering their position but declined to name those planning to approach the Takeover Panel. According to rule eight of the takeover code, any parties working in concert with Guoco would have had to declare their position by noon yesterday.
Guoco, which is controlled by the Malaysian billionaire Quek Leng Chan, strongly denied it solicited shareholders and expressed surprise at the strong take-up of its offer.
A Takeover Panel source said the body will consider all complaints.
The Rank board responded with a strongly worded statement yesterday urging remaining shareholders not to accept the bid. It said: “The board continues to believe that Guoco Group’s final offer of 150p per share substantially undervalues Rank and fails to reflect its underlying value and prospects, including the significant potential upside related to VAT claims.”
Guoco was obliged to make an approach for the company after acquiring a sizeable stake from Malaysian gaming group Genting Berhad, taking its holding to 41 per cent. The bid of 150p a share valued Rank, which runs the Mecca Bingo and Grosvenor Casino chains, at £586m. An unexpectedly high 15.6 per cent accepted the offer, giving Guoco a controlling stake without paying a premium.
Panmure analyst Simon French called the bid “very disappointing”, adding: “We wonder which shareholders considered 150p a share a fair price to surrender compared to our take-out estimate of 248p a share.”
Guoco has signalled it is willing to work with the current management structure and will maintain Rank’s public listing.