It has been all over the news about Mecca Bingo’s parent company Rank and how Malaysia’s Guoco is playing out its takeover bid. One minute directors are advising shareholders not to sell their shares for the offer price of 150 pence each; the next minute there is an about-face. We don’t seem to know what it going on from one minute to the next, but the fact that Ian Burke, CEO and Paddy Gallagher, the finance director of Rank, have resigned in response to the £586m takeover, is telling us something now. It is telling us that it is just that easy for Malaysian billionaire Quek Leng Chan to creep up on a British gambling firm and nab it in a takeover bid. No-one had the slightest inclination that this was going to take place.
Rank is the parent company for the Grosvenor Casino chain as well as Mecca Bingo and as far as the directors are concerned, the offer from Guoco undervalues the company dramatically. But the offer had to be made after Mr Quek came in with control over more than 56% of the shares. The resulting board recommendation last Thursday and then another rapid about-face saw both Burke and Gallagher resign, as they disagree with the fact that Guoco has no plans to de-list from the London Stock Exchange. They are therefore both still concerned that shareholders will be left holding shares in a de-listed company if they do not sell.
What is going to happen to Mecca Bingo? We have no idea, but we believe it will be business as usual. Malaysian firms have been attempting to get a majority foothold in a UK gambling company for a number of years, and it looks like they lucked out somehow this time. I always thought it would be Gala Coral to go to the Asians first, with their recent debt restructure!
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