The Rank takeover saga took an unprecedented turn yesterday when the Malaysian tycoon bidding for the gaming operator offered to allow investors who have accepted the offer to change their minds.
Quek Leng Chan’s Guoco Group insisted that, despite the Rank board’s decision on Tuesday night to advise shareholders to accept its 150p-a-share offer, it wanted to keep its holding below 75 per cent and retain Rank’s stock market listing.
Guoco, which launched a mandatory offer after pushing its stake in Rank past 30 per cent, said that it had no intention of taking the bingo and casino operator private and had discussed options for maintaining the listing with the Takeover Panel. The group, which so far has received acceptances pushing its stake from 41 per cent to 56 per cent, said that it would keep its offer open for another 14 days beyond today’s deadline to give the 15 per cent that have accepted the chance to withdraw their acceptances.
Guoco added that if its offer still ended up pushing its holding over the 75 per cent level at which a stock would normally be delisted, it would either ask the Takeover Panel to sanction the retention of the listing or explore ways of reducing the stake below 75 per cent.
The Hong Kong-listed Guoco said that it had been consistent in its determination to keep Rank’s listing since launching the offer in early May, arguing that its actions were designed to “provide protection for minority Rank shareholders”.
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Yesterday’s developments capped a remarkable week during which the Rank board altered its advice to shareholders three times based on its changing view of the risk that minority investors could end up with shares in a delisted company.
On Tuesday, after a boardroom split over the issue, Ian Burke, the Rank chief executive, and Paddy Gallagher, his finance director, stunned investors by resigning.
Yesterday Guoco said that it noted the resignations with “surprise and disappointment” and attacked “the various U-turns by the Rank board in relation to the offer”.
It has emerged that the investment firm contacted Mr Burke after his resignation in an attempt to make him his change his mind, but he rebuffed its overtures.
Guoco revealed that the board had sought an unconditional commitment that it would maintain the listing or as an alternative commit to allow investors to sell their shares at a price of 150p for a period of 18 months after the end of the offer. It had rejected the requests as “unreasonably onerous”.
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The fiasco has angered Rank’s British institutional investors, some of whom have called for a Takeover Panel inquiry into how a bid that was supposedly “priced to fail” ended up handing control to Guoco.
Shareholders have questioned both the lack of protection afforded by takeover rules and the way in which the situation has been handled by the board and its advisers from Goldman Sachs.
One investor said last night: “These assurances from Guoco are welcome, and would appear to ensure that no shareholder will get left behind, but why the hell couldn’t we have got here a week ago? That said, there’s now an issue of who’s going to be chief executive.”
All eyes will now be on the Rank board to see whether, after further consultation with investors, it issues yet another change of recommendation.
Last night it said that it had noted Guoco’s latest pronouncement and promised: “A further announcement will be made in due course.”