Rumours of a possible private equity bid of 300p a share have pushed up shares in leisure conglomerate
However, one trade buyer linked with the company has dismissed speculation that Rank might receive such an offer, which would value the company at £1.63bn (US$3.22bn).
David Harding, chief executive of leading UK bookmaker
“Many venture capitalists have looked at Rank but none can make the sums work,” said Harding. “The trouble is, as soon as the rumours break the shares go up, making it harder for a deal to go through.”
One candidate who could lead a private equity bid for Rank is Tom Singer, who stood down as chief operating officer of William Hill last month saying he was “looking forward to a fresh professional challenge”.
Singer was finance director of William Hill when it was owned by private equity groups CVC and Cinven, before its £835m (US$1.65bn) flotation in 2002. Harding said he was not aware of Singer’s plans in the short term.
Rank hopes to complete the sale soon of its
This would leave Rank as a pure gaming group, running bingo clubs and casinos, making it more likely that bookmakers such as
Peter Taylor, managing partner of Duke Street Capital, which has backed several leisure businesses, said Rank was “an obvious target for private equity but Ladbrokes might also be interested. Buying casinos and bingo would make them a similar group to Gala Coral.”
Other contenders could include 32Red, run by former Ladbrokes International managing director Ed Ware. One report said the private equity arm of an investment bank was also interested.
Rank is due to deliver a trading statement this Thursday, December 7.