Rank Group Plc (RNK), operator of the Mecca Bingo clubs, said its chief executive officer and finance director resigned from the board over the company’s response to the offer from Guoco Group Ltd. (53)
CEO Ian Burke and finance head Paddy Gallagher, citing feedback from institutional investors, told the board that Guoco’s bid will probably mean the cancelation of Rank’s shares from public listing, the Maidenhead, England-based company said in a statement on the Regulatory News Service. The two will remain with the company “to ensure an orderly handover,” according to the statement.
“They’re not helping the shareholders, are they?” said Robert McLean, a 66-year-old Derbyshire retiree who said he and his wife own 150,000 shares. “If they want to resign, wait till it’s over. It sounds as if it’s ‘game over.’”
Rank’s board yesterday altered its June 23 advice that shareholders accept a final offer of 150 pence per share from the Hong Kong investment company, even though it considered the bid undervalued the company. The board said yesterday shareholders who aren’t worried about a termination of the listing should reject the offer.
The company’s “flip-flopping” suggests Burke and Gallagher felt their positions had weakened, given the risk Guoco may gain control of more than 75 percent of shares by July 1, wrote James Hollins, an Evolution Securities analyst.
“Today’s news is likely to strengthen the case for shareholders to accept the Guoco offer of 150p before Friday, with the group facing an uncertain future both on the ultimate size of the stake of the majority shareholder and the personnel at the helm of the group to lead its ongoing growth strategy,” Hollins wrote. He has a “neutral” recommendation on the stock.
The board is meeting with advisers, and plans a further announcement “shortly,” according to the statement.
Rank fell less than 1 percent to 149.6 pence at the 4:30 p.m. close in London. The shares have risen 18 percent so far this year, giving it a market value of 584.4 million pounds ($936 million).
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