Rank in talks over £250m deal to buy rival Gala’s 24 casinos

By Perry Gourley
Published on Tuesday 31 January 2012 00:00

Leisure giant Rank yesterday confirmed it was in talks with private equity-owned Gala Coral over the possible acquisition of its casino business.

The deal, thought to be worth up to £250 million, would see Rank merge its 35 Grosvenor Casinos chain with the 24 casinos owned by Gala to make it the UK’s biggest operator.

Gala owns six casinos in Scotland, three in Glasgow along with sites in Aberdeen, Dundee and Edinburgh, while Rank operates casinos in Aberdeen and Dundee.

Rank, 74 per cent owned by Malaysian-based gambling group Guoco, stressed the “terms of any such acquisition have not yet been finalised and there is no certainty that any transaction will occur”.

But analyst Simon French of Panmure Gordon said that, with no other obvious buyer for the assets, he “would be surprised if the transaction did not happen”.

“This would be an excellent strategic move in our view, transforming the group into the UK’s largest casino group,” he said.

French said the two operators were a good fit geographically and he didn’t believe competition laws would prevent a deal. “For example Rank is strong in the north-west of England where Gala is traditionally weak and similarly Gala has a strong presence in Scotland where Rank has just two casinos,” he pointed out.

If a deal did go ahead, Rank would have the option to part-fund it with its estimated £55m net cash pile.

Rank recently outlined ambitious expansion plans for its Grosvenor chain including an accelerated roll-out of its G-Casino format which aims to attract younger and less formal customers than traditional casinos.

Gala Coral is owned by private equity players Candover Investments, Cinven and Permira and a sale would reduce its debts and enable it to focus on its core bingo and betting business.

In 2006 Gala – which at the time was the UK’s largest private company – bought the Scottish-based County bingo hall chain in a £64m deal.

The deal increased Gala’s Scottish presence to 30 clubs, with the acquired sites mostly sited in and around Glasgow.

Shares in Rank closed up 4.10p, or 3.2 per cent, at 131.1p.

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