Guoco Group Offer - Change of Recommendation

RNS Number : 0098J

Rank Group PLC

23 June 2011

 

23 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 Guoco Group's Offer Update and Change of Recommendation

The Rank Group Plc ("Rank" or the "Group") notes the announcement by Guoco Group Limited ("Guoco Group") on Friday, 17 June 2011 that its offer for Rank (the "Offer") will close for acceptances at 1.00pm (London time) on Friday, 1 July 2011 ("Closing Date") and will not be extended.  The Board of Rank (the "Board") sets out below its views on the Offer and its recommendation to Rank shareholders.

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.  The Board believes that this position is reinforced by the trading update announced today.

However, the Board believes that it is important for Rank shareholders to understand that, while Guoco Group has announced its intention to maintain the listing of Rank's shares, if sufficient further shareholders accept the Offer such that the number of Rank shares held in public hands falls below the UK Listing Authority's listing eligibility threshold of a free float of 25 per cent., Guoco Group has reserved its right to consider all options available to it.  These options may include the cancellation of the listing of Rank shares on the Official List and the admission to trading of Rank shares on the London Stock Exchange's main market for listed securities (the "Listing").  In the event of a cancellation of the Listing, Rank shareholders who did not accept the Offer would no longer be provided the protections available to them under the Listing Rules and would own shares in an unlisted company controlled by Guoco Group.  This would significantly reduce the liquidity and marketability of Rank shares which have not been accepted into the Offer and the value of any such Rank shares may be significantly adversely affected as a consequence.

The Board does not currently believe that Guoco Group has received sufficient acceptances to seek the cancellation of the Listing of Rank shares.  However, the Board has no certainty that this will continue to be the case at 1.00pm (London time) on the Closing Date and therefore there is no certainty that the Listing of Rank shares will be maintained following the closure of the Offer.  Further, Rank shareholders will not know before the Closing Date whether the Listing of Rank shares will be maintained and, in the event that Guoco Group seeks the cancellation of the Listing of Rank shares (as it has reserved the right to do), 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, their ability otherwise to dispose of their Rank shares following closure of the Offer will be materially restricted.

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 shareholders accept the Offer, as they will be doing in respect of their own beneficial shareholdings.  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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