Rank the parent company of Mecca Bingo and Grosvenor Casinos has had daily entries in the media over the last few weeks over its takeover offer which has turned out to be far from simple. The latest news is that Guoco has now written to investors who have supported its £585 m offer and given them an unprecedented opportunity to change their minds. It seems that the investment groups is facing owning a company it doesn’t really want.

The Malaysian firm Guoco, which is owned by billionaire Quek Leng Chan, has taken the steps in the hope that it will not be forced to buy any further stakes in the gambling giant. It has also given confused shareholders an extended period of time to consider whether to accept or decline the offer.

Guoco added: ‘Any Rank shareholder who has accepted the offer will be entitled to withdraw his acceptance.’

While Guoco may get out of buying anymore of the Rank group the CEO and CFO of Rank will still looking for new jobs when things clear up.

History of Takeover Offer

Following Guoco increasing its stake to 41% it was obligated to make a formal offer for the company. The investment group suggested it was not looking to take control of Rank and offered 150p per share which was roughly the share price at the time. Rank and a number of investors claimed this ‘significantly undervalued’ the group and some investors went as far to suggest the Casino division was potentially worth the offer of £585m alone.

It had been thought that this was the end and the only change would be that Guoco would be the biggest shareholder in the company. However the unexpected happened and 15 percent of the other shareholders supported the offer leaving Guoco with 56 percent of the company.

While the company recommendation had initially been to reject Guoco's offer, it reversed its stance last week claiming that minority shareholders could be left holding a small stake in a private company, making it difficult for them to sell their shares. If Guoco acquires another 19 percent of the share it could apply to delist the company.

That recommendation was changed again earlier this week following Guoco's insistence that it had no plans to delist Rank, with independent directors telling investors “who are not concerned that the listing may at some stage be cancelled” to reject the offer.

The contradictory advice lead to much confusion of shareholders in the company and as a result both the chief executive, Ian Burke, and finance director, Paddy Gallagher, announced they had resigned from the board.

Rank said the duo disagreed with this, saying that after talks with institutional shareholders, that it was now “more than likely that the offer will result in a cancellation of the listing of Rank’s shares”.

"Following the flip-flopping of recent days ... we think the CEO, Ian Burke, and CFO, Paddy Gallagher, felt their positions had become untenable," commented Evolution Securities analyst James Hollins.

No doubt this is not the end of the story and there will be some further highlights in the coming weeks.