Change in Rank Board Recommendation

RNS Number : 1476J

Rank Group PLC

27 June 2011

 

27 June 2011

The Rank Group Plc

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO THE SAME WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

Response to Statement by Guoco Group - Change in Rank Board Recommendation

The Rank Group Plc ("Rank" or the "Group") notes the statement by Guoco Group Limited ("Guoco Group") on Friday, 24 June 2011 regarding its offer for Rank (the "Offer"). 

The statement sets out Guoco Group's intention to continue the listing of Rank shares on the London Stock Exchange (the "Listing") in clearer and more comprehensive terms than previously explained by Guoco Group.  In particular, the Board of Rank (the "Board") notes that:

- Guoco Group has no intention of taking any steps available to it under the Listing Rules to cancel Rank's listing voluntarily while sufficient shares remain in public hands;

- In circumstances where less than 25% of Rank shares remained in public hands, Guoco Group intends to discuss with the FSA whether the free float is sufficient for Rank to remain as a listed company; and

- In the event that the FSA determines otherwise, Guoco Group will explore with the FSA ways in which the necessary percentage of shares in public hands could be restored over a reasonable period of time, so far as commercially reasonable.

The Board believes that this more detailed explanation of Guoco Group's intentions regarding the Listing of Rank shares is helpful for the Board and Rank shareholders as they consider the Offer.

The Board also notes that the issues raised in the announcement made by Rank on 23 June 2011 had been discussed with Guoco Group's representatives as part of an ongoing dialogue, which included discussions with Guoco Group's representatives and joint meetings with Rank shareholders, since the Offer became unconditional. However, the announcement on 23 June 2011 was made by Rank without any prior consultation or discussion with Guoco Group.

While the Board believes that the statement provides a more detailed explanation of Guoco Group's intentions regarding the Listing of Rank shares, it does not provide the Board with certainty that the Listing will continue in the event that the FSA requires the cancellation of the Listing and Guoco Group determines that the actions required are not commercially reasonable.  As a result, following Guoco Group's statement on Friday, 24 June 2011, Rank sought assurances from Guoco Group that would provide Rank shareholders with an unconditional commitment from Guoco Group to either continue the Listing of Rank Shares on the London Stock Exchange through the sell down of sufficient shares to maintain the Listing or, in the event of a cancellation of the Listing, the opportunity for a period of 18 months following the closing of the Offer, for any remaining Rank shareholders at that time to participate in a subsequent offer for Rank at a minimum price of 150p per share.  Guoco Group has been unwilling to provide such commitments.

In this context, the risks of a cancellation of the Listing of Rank shares remain.  Rank shareholders will not know before the Closing Date whether the Listing of Rank shares will be maintained and, in the event of the cancellation of the Listing of Rank shares, then Rank shareholders who have not accepted the Offer by its closure will own shares in an unlisted company controlled by Guoco Group and will have no further opportunity to accept the Offer.  In addition, Rank shareholders would no longer be provided the protections available to them under the Listing Rules, the liquidity, marketability and value of Rank shares will be significantly adversely affected, and Rank shareholders' ability to dispose of their Rank shares following closure of the Offer will be materially restricted.

The Board believes that Rank shareholders should understand the risks associated with the potential cancellation of the Listing.  However, it is important that Rank shareholders also understand that the Board continues to believe that Guoco Group's final Offer of 150p per share substantially undervalues Rank and fails to reflect its underlying value and prospects.  For some Rank shareholders these risks may be acceptable in the context of the benefits of continuing to hold their Rank shares.  For other Rank shareholders these risks may outweigh these potential benefits.  

Accordingly, while the Independent Directors of Rank, who have been so advised by Goldman Sachs International, consider the Offer to substantially undervalue Rank, for the reasons stated above they recommend that Rank shareholders who are concerned that the Listing may at some stage be cancelled accept the Offer.  For those Rank shareholders, who are not concerned that the Listing may at some stage be cancelled, the Independent Directors recommend that they reject the Offer, as the Independent Directors will be doing in respect of their own beneficial shareholdings that have not already been accepted into the Offer. In providing advice to the Independent Directors, Goldman Sachs International has taken into account the Independent Directors' commercial assessments.

Enquiries:

The Rank Group Plc

Dan Waugh                   [phone]

Goldman Sachs International

Nick Harper                   [phone]

Financial Dynamics

Ben Foster                    [phone]

The Independent Directors, accept responsibility for the information contained in this document, except that the only responsibility accepted by them in respect of the information contained in this document relating to Guoco Group, its subsidiary undertakings and the directors of Guoco Group and/or any such subsidiary undertakings, which has been compiled from published sources, is to ensure that such information has been correctly and fairly reproduced and presented. Subject to the aforesaid, to the best of the knowledge and belief of the Independent Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of that information.

The "Independent Directors" are the Directors of Rank, whose names are set out the circular dated 26 May 2011, except for Tim Scoble.

Tim Scoble is a non-executive director of Rank and acts, and has done so since his appointment, as a representative of Guoco Group on Rank's Board. To manage this conflict of interest, Tim Scoble has not participated, and will not participate, in the Board's discussions or receive any information in relation to the Offer.  Tim Scoble does not, therefore, accept responsibility for the views and opinions of the Independent Directors of Rank in relation to the Offer as set out in this announcement.

Goldman Sachs International, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Rank and for no-one else in connection with the offer and will not be responsible to any person other than Rank for providing the protections afforded to clients of Goldman Sachs International, nor for providing advice in relation to the offer or any other matters referred to herein.

Under Rule 8.3(a) of the City Code on Takeovers and Merger (the "Takeover Code"), any person who is interested in 1% or more of any class of relevant securities of Rank or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified.

An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) Rank and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of Rank or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of Rank or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of Rank or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) Rank and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of Rank or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.  Opening Position Disclosures must also be made by Rank and by any offeror and Dealing Disclosures must also be made by Rank, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).  Details of Rank and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on [phone].

 

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