That’s wholly inaccurate," the source said when asked if Genting had made an approach. Genting said it did comment on media speculation. Rank shares have jumped 13 percent since Monday’s close, after the Daily Mail reported that Genting, already an 11 percent shareholder, was strongly rumoured to have approached Rank with a cash offer of us$ 0.24 per share.
Rank shares closed on Wednesday at us$ 1.96, valuing the company at about us$ 772 million. Genting bought into the British casino market in 2006 when it acquired its biggest player, Stanley Leisure, for us$ 1.2 billion. It is like to face competition concerns if it makes a bid for Rank, Malaysian investment bank CIMB said in a research note.
Rank has had a torrid time over the last year. Its bingo clubs have been hammered by a ban on smoking and the forced removal of nearly 1,000 lucrative slot machines, while its casinos have been hit by a surprise hike in tax.
Its share price slumped more than 20 percent after a profit warning in October and in December it scrapped its final dividend and shelved 30 million pounds of projects as its woes continued.
Takeover speculation took off in February after Rank unveiled plans to transfer its pension liabilities to an insurer, making it a more attractive target in the view of some analysts. Genting bought most of its Rank stake in December. Hong Kong-listed investment house Guoco and the Richardson property and haulage family have also been building stakes.