Malaysians snap up 10% of gaming group Rank
A GIANT Malaysian gambling group has secretly built up a 10% stake in Rank, the embattled casino-and-bingo operator.
Genting, which has extensive gambling businesses across Asia and in the UK, is understood to have taken the stake as a preemptive move against any rival bid for Rank.
Last week it emerged that Rank, led by chief executive Ian Burke, had rebuffed an approach from Harrah's Entertainment, the owner of the famous Caesars Palace casino and one of the world's largest gambling operators. Harrah's wanted to trade part of its UK business, London Clubs International, for a 28% stake in Rank.
City sources say that other predators are circling. Ladbrokes is seen as a potential bidder, as is Aspers, a joint venture between Damian Aspinall and James Packer.
Genting already has extensive UK interests. Last year it bought Stanley Leisure for £639m, making it the largest casino operator. It had been a long-standing investor in London Clubs International before the Harrah's takeover.
The most recent quarterly accounts of Genting International revealed it had decided to write down the value of the Stanley business by £152m.
It has been a torrid year for Rank and other leisure companies � particularly those with bingo businesses. Share prices have tumbled since the government introduced a ban on smoking in clubs.
Riva Gaming, one of Rank's rivals in the bingo business, recently warned that 100 bingo clubs could close within six months.
The shares have also been hit by uncertainty over the future of the UK's planned reform of gaming laws. Gordon Brown has backed away from a plan to deregulate the sector and allow the construction of new, larger casinos.
Rank shares have fallen by more than half in the last year, and underperformed the FTSE All-Share index by 64% in the same period.
But last week they were among the best-performing on the London stock market. They closed at 100½p, up 25%, as traders piled in on the back of the Harrah's approach.
The big gaming groups are attracted by Rank's relatively large share of the limited number of UK casino licences. There are 143 licences in the UK, of which Rank holds 45, though 12 of these are not in use at present.
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