On Wednesday, Rank Group announced it had entered into a revised conditional agreement to acquire 19 UK casinos from Gala Coral Group. The deal, first announced in May 2012, originally called for 23 Gala casinos to change hands for a price of £205m, but the UK Competition Commission forced the parties to make a few tweaks to avoid (at least the appearance of) the formation of an oligopoly by Rank and Malaysian outfit Genting, the UK’s other remaining casino giant. Assuming the competition watchdogs approve the amended acquisition, Rank will pay Gala £179m, and some 2,200 Gala employees will need new business cards.
As one door opens, another door shuts. Rank is apparently in advanced talks with Betfair on a deal that would see the betting exchange acquire Rank’s online betting offshoot Blue Square. In January, Rank announced it was mulling a possible sale of the money losing Blue Square operation, which Rank acquired a decade ago for £63m. An unidentified industry source told The Times he’d be “amazed” if Betfair paid more than £5m for the acquisition, given that Blue Square had lost almost that much in the first six months of its fiscal year, despite a boosted marketing spend that Rank management hoped would return Blue Square to profitability and thus make it a more attractive acquisition target.
The appeal for Betfair to acquire Blue Square on the cheap is obvious. This week’s quarterly financial statement singled out Betfair’s fixed-odds sportsbook as one of the few bright spots on the company’s books. According to eGamingReview, Betfair CEO Breon Corcoran hopes to fold the company’s sportsbook into Blue Square’s operations, which would then be marketed as the company’s fixed-odds brand. However, eGR’s sources said that while Betfair might only have to pay a pittance upfront to acquire Blue Square, the ultimate acquisition price could top £35m if Blue Square met certain performance benchmarks.