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Ian Burke, chief executive of the Rank Group since March 2006, and Paddy Gallagher, finance director of Rank since June 2008, have abruptly stepped down from their positions this week, the London Stock Exchange announced on Tuesday morning.
The two executives stepped down amidst talks of a potential takeover and fears of the company being delisted on the Stock Exchange.
The Rank saga continues following a “bizarre takeover” by Hong Kong investment group Guoco that was forced under takeover rules to announce a £585m cash offer for the bingo and casino operator. Guoco was unable to bid after buying an11.6% stake in Rank from Malaysian casino group Genting when it came up for sale.
James Hollins, a leisure analyst at Evolution Securities, wrote in a note to clients: "Following the flip-flopping of recent days – (1) reject the Guoco bid (the 'correct' recommendation), (2) accept the bid (the 'forced' recommendation), (3) take the option that suits your risk/reward needs (the 'pragmatic' but inconclusive recommendation) – we think the CEO, Ian Burke, and CFO, Paddy Gallagher, felt their positions had become untenable, notably given there remains the risk that more than 75% of shares may be in the control of Guoco come 1pm on [the offer closing date of] Friday 1 July."
The company issued a statement on Tuesday that read: "Following the announcement by the board yesterday in relation to the offer for the group by Guoco, Ian and Paddy have expressed to the board their view that, given the feedback received from institutional shareholders since the announcement, coupled with the advice from the group's brokers in light of this feedback as to the possible level of acceptances of the offer, it is now more than likely that the offer will result in a cancellation of the listing of Rank's shares … on the London Stock Exchange."
Rank operates Mecca Bingo and other subsidiaries. Its share prices were trading just below the offer price of 149.76p Tuesday morning.
- Aaron Goldstein, Gambling911.com
