by Renee Israel
Rank Group, the UK gambling giant, has launched an indicative bid for the
Gala Coral Group's land-based casinos.
Rank's £250 million bid for Gala Coral could see them becoming the
biggest casino operator in the UK, according to number of venues owned. The deal
would see the Rank Group merging its 35 Grosvenor casinos with Gala Coral's 24
outlets.
A statement from Rank read: "Rank confirms that it is in discussions with
Gala Coral Group about a potential acquisition of Gala's casino business. The
terms of any such acquisition have not yet been finalized and there is no
certainty that any transaction will occur. A further announcement will be made
in due course."
Rank Group Wants to Turn Casinos into Entertainment Venues
A person close to the company has suggested that Rank plans to increase the
appeal of the Gala casinos in much the same way as it has been doing with its
own casinos. It hopes to make the casinos more appealing to women and people
under the age of 35.
"Rank is against the idea of [a casino having] just gambling tables and a few
slots - they are trying to bring casinos into the mainstream so people
increasingly see it as a valid night out. [It's] much more in the entertainment
vein rather than the gambling vein," commented the person.
According to statistics released by Rank, only 5 percent of adults in Britain
frequent casinos, while that figure is 12 percent in France and 28 percent in
the United States.
In the year ending September 2011, Gala's casino generated earnings of £26.7
million, before tax, depreciation, interest and amortization. Its total revenues
were £134.4 million.
Rank Grosvenor's casinos made up more than a third of the total revenue for
the first half of 2011 and accounted for more than two thirds of their £29.5
million operating profit for the period.
The Rank Group Plans to Own 45 Casinos by 2015
The Rank Group plans to have a total of 45 casinos by 2015 and this deal
would see the group quickly overtake their Malaysian business rival, Genting
which currently owns 46 casinos in the UK.
Gala Coral has a net debt of £2.1 billion. In the full-year results that it
published in September 2011, Gala reported a post-tax loss of £643.4 million,
which it attributed primarily to exceptional costs.
Rank won a case in November which was ruled on in Europe's highest court in
which they claimed they had overpaid bingo tax to the UK government since 1973to
the amount of £253.4 million.
