Rank Group PLC (LON:RNK) has sent a letter to shareholders outlining the reasons for continuing to reject Guoco Group’s 150 pence a share offer for the bingo hall and casino operator.
The offer was tabled earlier this month and Rank today reiterated its view that the offer substantially undervalues the company and its prospects, and it recommends that shareholders take no action.
Guoco announced on May 9 it had acquired an 11.6 percent stake in Rank at 150 pence per share and was planning to raise its stake to 40.8 percent, thus triggering a mandatory offer. It declared the 150 pence level of the offer as final.
Rank said today it is a leading UK gaming group with an established track record and opportunities for growth and value creation. It also believes it has the financial strength to create value and deliver shareholder returns.
Chief executive Ian Burke said: "Rank is an excellent business with strong positions and trusted brands in fundamentally attractive markets. We are executing a clear strategy to generate value for all shareholders, achieving sustainable growth in earnings and dividends through building Britain's favourite gaming-based entertainment brands."
"Given our strong financial position, we believe that shareholders should have the opportunity to benefit fully from the growth opportunities available to Rank. Fundamentally, we do not believe it is the right price at which to sell shares in Rank."