Rank remains confident over £205m acquisition of rival Gala

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Mecca Bingo owner Rank yesterday said its proposed acquisition of Gala Casinos was still on the cards despite the £205m deal being referred to competition authorities.

The planned merger would see Rank leapfrog Malaysian firm Genting as the UK’s biggest casino chain, giving Rank’s Grosvenor division 57 sites.

The Office of Fair Trading (OFT) handed the plans to the Competition Commission in August, but Rank said discussions were ongoing over changes to the previously agreed terms following the referral.

Maidenhead-based Rank also unveiled first quarter figures showing a 5 per cent like-for-like rise in sales, driven by 8 per cent growth at Grosvenor Casinos and a 2 per cent rise at Mecca.

Rank said its Grosvenor Casinos benefited from 13 per cent growth in customer spend, which offset a 5 per cent drop in customer visits in the 15 weeks to October 14.

Revenue growth at Grosvenor came mainly from a higher than usual win margin in London driven by major player activity, Rank added.

During the second quarter, Rank will complete the refurbishment of its Grosvenor casino in Portsmouth to the new G casino format, while in the third quarter it plans to open a new G casino format venue in Reading.

The Mecca brand enjoyed a strong performance from its digital channel, Rank added.

Meccabingo.com continues to show strong revenues growth at 11 per cent, which has been supported by the recent £10.4m television campaign.

Rank, whose chief executive is Ian Burke, had agreed to pay an initial £182.5m for Gala casinos, with the rest paid in stages until 2015 when certain conditions are met.

The Competition Commission is expected to report on the Rank-Gala deal by February 3 and has the power to block the move altogether.

The majority of Rank’s casinos are outside London, with the company focused on the faster roll-out of its G Casino format, which attracts a younger, less formal crowd.

The Rank business employs more than 3,500 staff. Rank is listed on the London Stock Exchange but majority owned by Guoco, the investment vehicle of Malaysian billionaire Quek Leng Chan.