Rank Group has ended negotiations with Gala Coral on a potential deal to buy the latter’s casino operations. The two parties entered discussions in January on a proposed £250m deal that would have created the UK’s biggest casino operator. But Rank CEO Ian Burke ultimately decided the deal wouldn’t provide good value for shareholders and walked away from the table. A Gala Coral spokesman played the ‘we weren’t fired, we quit’ card by saying now that Rank’s “unsolicited approach” had come to naught, “we are very happy to continue to drive growth from our casinos which are performing very strongly.”
Rank, which owns the Mecca Bingo brand and the Blue Square online betting business, also operates casinos under the Grosvenor and G Casino brands. The addition of Gala’s operations would have enabled Rank to surpass the UK’s current largest casino operator, Genting. (Both Rank and Genting are Malaysian controlled.) With the Gala deal dead, Rank will now focus on its plan to open 12 new G Casino locations by 2015. Financially troubled Gala will continue trying to execute its turnaround plan, but analysts at Fitch believes any additional time Gala focuses on its casino division “is likely to reduce the amount of time management can spend on maintaining competitive strength at the Coral betting arm, which has been gradually losing market share to rivals William Hill and Ladbrokes.”
Perhaps hearing Rank’s footsteps, this week Genting received outline planning permission from Solihull Metropolitan Borough Council for a casino/hotel project at the NEC in Birmingham. There’s still a long way to go before any ground is broken, but the £120m project is expected to create 1,000 jobs when it opens for business in 2013.
