Rank to buy Gala Coral's casinos
Conditional agreement worth £205m follows earlier breakdown of talks between the two operators.
Rank Group has reached a conditional agreement to acquire Gala Coral’s 23 land-based casinos for a sum of £205m, some £45m less than the figure first mooted when discussions between the parties began in January this year.
The news comes less than two months after the two parties ended discussions over the potential sale, with the former explaining “It became clear that the proposed terms of the acquisition would not serve the best interests of Rank’s shareholders”.
However Rank chairman and CEO Ian Burke (pictured) explained today in a statement that “By rolling out the ‘G Casino’ format into the Gala estate and expanding the Grosvenor Casino brand into 11 new cities, we will accelerate the growing awareness of the brand and support the development of a multi-channel gaming business.”
The agreement covers 23 venues across the United Kingdom, representing all of Gala’s land-based casinos with the exception of Dundee and Gibraltar, bringing Rank’s estate up to 58 properties. Nine of these venues will be rebranded under Rank’s ‘G Casino’ banner.
The deal also includes three non-operating licences, but not the one held by Gala Coral for the City of Westminster. It is conditional upon the approval of Rank shareholders and receipt of UK merger control clearance. It is set to be completed in Q3 this year.
Under the terms of the initial discussions in January, Rank had been poised to acquire all 24 casinos in the United Kingdom for a sum of £250m.
Since taking over as Gala Coral group CEO in November 2010, Carl Leaver has overseen a management restructure with former HBOS chief Andy Hornby taking over as MD of Coral, Ladbrokes veteran John O’Reilly arriving as Coral Interactive MD and Per Widerström arriving from bwin.party to head up online operations for the Gala brand.
However no appointment was made by Leaver to focus on the land-based side of Gala, while the Eurobet.com brand was discontinued last year, although Eurobet.it is still active in the Italian market.
Nick Batram, analyst with Peel Hunt, retained his firm’s ‘Buy’ recommendation on Rank shares. He described the move as “strategically sound” and said: “The Gala estate presents significant upside and at the same time substantially improves the overall quality of group earnings.”