Rank the owner of Mecca Bingo and Grosvenor Casinos has done a u-turn over the 150p share offer for the company which it previously claimed ‘substantially undervalues’ the company. It is now recommending that shareholders accept the offer.

The Rank board suggested that shareholders should now accept the offer, which values the company at £585, by Guoco an investment firm run by Malaysian billionaire Quek Leng Chan.

Rank is now suggesting that if shareholders do not accept the offer it could have negative consequences for their position. If the number of shares held by the public falls below 25 percent then Guoco, as the major shareholder, could delist the company making it difficult for the remaining shareholders to sell their shares. Guoco already owns 56 percent of the shares in Rank.

Shares in Rank are currently listed on the FTSE 100 and valued at 149.8p per share at the time of writing. It would appear that since Cuoco now control more than 50 percent of the company that board members realise that it is in their own best interests to support the major shareholder.

History of Guoco Offer

On 6 May 2011, a wholly-owned subsidiary of Guoco Group Limited ("Guoco"), announced the acquisition of 45,251,203 of Rank Shares, representing approximately 11.6 percent at 150p per share. The Acquisition increased Guoco's beneficial interest in Rank to 159,486,902 shares, representing approximately 40.8 percent of Rank's issued share capital.

Earlier this month Rank revealed that Guoco’s 150p per share offer had received additional 15.6% acceptances and had been declared as unconditional, as Guoco now owns 56.4% of the issued share capital.