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Gambling sector's big players are swept up in approach speculation
Fresh speculation swept the gambling sector yesterday after reports of an approach for Gala Coral's casinos business from American giant Harrah's Entertainment.
Las Vegas-based Harrah's is looking to combine its London Clubs International (LCI) operation with Gala Casinos creating a business with 40 casinos, it was reported. Meanwhile, shares in Grosvenor Casino owner Rank soared amid mounting speculation of a takeover bid from its biggest UK rival.
Rank's shares continued their rise after Malaysian gaming firm and Stanley Casino owner Genting upped its stake in the business to more than 11 per cent on Thursday.
Genting has built up its stake since last November as Rank – which also owns the Mecca bingo business – tumbled on warnings of falling revenues and profits due to last summer's smoking ban.
Gala Coral, which is owned by private equity firms Candover, Permira and Cinven, declined to comment on the reported approach.
The firm, based in Barking, Essex, has more than 19,000 UK staff and made profits of 309.9m on 1.3bn revenues in the year to September 29.
Talk of Harrah's latest move comes three months after Rank is said to have rebuffed proposals from Harrah's to swap the LCI business for a 28 per cent stake in the gaming firm. LCI has casinos in London, Nottingham, Brighton, Manchester and Southend. Meanwhile investor excitement continued to bubble over a possible bid for Rank by Genting.
A combination of Rank and Genting's casino business would create a UK giant with almost 80 sites.
Rank is also seen as a target, as alongside its 32 existing casinos it holds sought-after licenses for a further 13. Genting is now Rank's second-largest shareholder behind Hermes, the BT pension fund manager.
There were also reports of a possible approach from private equity firm Duke Street Capital in December.
Shares in Rank have fallen by more than half in the past year.
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Weather for Yorkshire
Thursday 24 May 2012
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