The whirlwind that continues to sweep through the Rank Group has claimed its latest victims as two members of the board resigned. Since Guoco started to sniff around the gaming firm, there have been ructions amongst those at the top of the company and it’s come to a head. Chief Executive Ian Burke and Finance Director Paddy Gallagher are the two to go and to say the resignations were expected would be an outright lie.
The announcement, made this morning to the London Stock Exchange, read that, “Both have also given notice to terminate their employment as chief executive and finance director and will remain with Rank so as to ensure an orderly handover to their respective successors when they have been identified.”
As for the reasoning behind it, they added that, “Following the announcement by the board in relation to the offer for the Group by Guoco Group Limited, Burke and Gallagher stated it is now more than likely that the offer will result in a cancellation of the listing of Rank’s shares on the official list and the admission to trading of Rank’s shares on the London Stock Exchange’s main market for listed securities.”
According to eGaming Review, they also added that the board would be “convening urgently” in the wake of the departures. Meanwhile James Hollins, analyst at Evolution Securities, added, “We think [they] felt their positions had become untenable, notably given there remains the risk that more than 75% of shares may be in the control of Guoco come 1pm on Friday 1 July.
“This is not guaranteed (the effective holding was 56.8% on 27 June), although, with limited visibility on the likely actions of major shareholders, Guoco could end up with more than a 75% holding and de-list the shares, leaving the minority shareholders with a stake in a private company.
“Today’s news is likely to strengthen the case for shareholders to accept the Guoco offer of 150p (c23% below our fair value of 185p) before Friday, with the group facing an uncertain future both on the ultimate size of the stake of the majority shareholder and the personnel at the helm of the group to lead its ongoing growth strategy.”
It might have been even better for the firm to delist completely and head back into the world of being private. What is for sure is that the company has a rocky road ahead of itself.