Burke rejoins Rank as board issues fifth recommendation
Rank Group takeover by Guoco reaches "comedic levels" as UK gaming company issues fifth shareholder recommendation, this time to reject the deal, and reinstates CEO who only resigned last week.
Ian Burke, CEO of Rank Interactive, who resigned from the company’s board last Tuesday, has been reinstated and given the role of chairman following a startling fifth change of recommendation during its takeover saga with Guoco Group.
Described by one analyst as having reached “comedic levels”, the Rank board this morning announced to the London stock exchange that it had become comfortable with Guoco’s assurances of retaining a stock market listing should the deal go through and that it therefore recommended to shareholders “ its fifth change of heart in less than two months “ to reject the “undervalued” 150p a share offer.
Analysts said they were surprised the board had issued another rejection recommendation as there is still the possibility Guoco Group could chose to delist Rank from the stock market if it acquires more than 75% of the UK gaming company’s shares between now and the extended 15 July deadline.
In a note this morning James Hollins, analyst at Evolution Securities, said that with Guoco currently holding a significant majority share of 80.76% in Rank, “the prospect [for shareholders] of owning a stake in Rank, listed or not, may remain an issue for some investors.” He add that this would add “further confusion” into the market and that Guoco “needs to sell its intentions to shareholders.”
On Thursday Guoco Group subsidiary All Global Investments Ltd (AGIL) issued a statement.
In an announcement this morning Guoco said that since 30 June it had held discussions with “certain” major Rank shareholders and its board and believes that it is “well-positioned for future growth; is supportive of its current strategic direction; and that there are a number of potentially attractive investment opportunities and expansion that should be an important priority for management.
Burke (pictured), who has rejoined the board six days after first resigning alongside FD Paddy Gallagher last Tuesday, and who will become chairman and chief executive on the close of the offer, said: “I am pleased to rejoin the board. Guoco Group’s announcement regarding the extension of the offer and the mechanism to close it has addressed concerns that had provided significant uncertainty for shareholders.
“Along with the board, I am excited about the future for Rank and providing all shareholders with the ability to benefit fully from the substantial opportunities for growth and value creation that are available to Rank.
“We believe that Rank is an excellent business with strong positions and trusted brands in fundamentally attractive markets. Now that certain risks and uncertainties have been removed, we do not believe that this is the right price at which to sell shares in Rank.”