UK gambling regulators have given their blessing to Rank Group’s acquisition of rival Stride Gaming.
On Friday, Stride announced that the UK Gambling Commission (UKGC) had informed the company that it was “determined to approve” Rank’s proposed £115m acquisition of Stride, which the company had announced on May 31.
The Royal Court of Jersey is scheduled to hold a hearing on the Stride acquisition on October 2 and, pending a favorable outcome of this hearing, Stride’s shares will stop trading on the UK exchange on October 3 and Rank’s acquisition will be finalized on October 4.
In February, Stride confirmed ‘press speculation’ that it was open to being acquired, as part of a strategic review the company launched after experiencing some “challenging trading conditions” in its UK online bingo and casino operations.
Last November, the UKGC hit Stride with a £7.1m penalty for anti-money laundering and social responsibility shortcomings. The penalty was one of the highest the UKGC has meted out to date and was nearly twice the amount that Stride had set aside in anticipation of its regulatory spanking. Rank was penalized £500k one year ago for its own regulatory failures.
Stride’s fiscal H1 report showed the company’s revenue fell 13% to £39m in the six months ending February 28, while adjusted earnings fell 23% to £6.15m. Stride cited “regulatory headwinds” in its UK online operations as a major factor in the declines, as well as the company shifting its focus toward “casual games” players.
Rank Group’s fiscal 2019 results showed its revenue over the 12 months ending June 30 rising 1% to £695m, but operating profit fell 22% to £39m and after-tax profits from continuing operations slipped 23% to £27.6m. However, the company stressed that its operating profit was up 20% in its fiscal H2 following the company’s ongoing ‘transformation program’ to cut costs and emphasize its strong digital division, which will get a further boost from the addition of Stride’s brands.
