Will they, won't they?

[TightEnd]

Jan 30 (Reuters) - British bingo and casino operator Rank confirmed on Monday it is in talks with private equity-owned Gala Coral over the possible acquisition of Gala's casino business.

"The terms of any such acquisition have not yet been finalised and there is no certainty that any transaction will occur," Rank said in a statement.

A report in the Sunday Times said Rank, which owns the Grosvenor Casino and Mecca Bingo chains, was in talks to buy the business for up to 250 million pounds ($392 million).

The deal would see Rank, which is 74 percent owned by Malaysian-based gambling group Guoco, merge its 35 Grosvenor Casinos chain with the 24 casinos owned by Gala, making it Britain's biggest operator.

Shares in Rank closed on Friday at 127 pence, valuing the business at 496 million pounds.

[Ant040689]

Sounds like it will be good for the longevity of the GUKPT if the deal was to go ahead or is this bad for the poker community, don't knwo what to make of it.

[KarmaDope]

Sounds like it will be good for the longevity of the GUKPT if the deal was to go ahead or is this bad for the poker community, don't knwo what to make of it.

Pluses and minuses I would imagine:

+ Grosvenor have stated an intention to have a card room in all their casinos. This does include the completely electric E Casino in Liverpool.

-  Lack of competition in certain areas where Genting don't have a presence.

-  Some casinos might get shut down in areas where Rank have a number of them, reducing availability of games.

+ Grosvenor seem to embrace poker more than Gala.

[Ant040689]

The having a poker room in all of their casinos extend to the one they have just off leicester square, if it does then that is a lovely amount of card rooms within a stones throw away of eachother. Along with fox poker and empire.

[KarmaDope]

Hope so. I can't remember where I saw it but pretty much all Grosvenor Casinos have a card room now.

[mulhuzz]

wonder if the acquisition would also include the Gala Gibraltar, which also operates the Bingo...

[tikay]

EGR reported as follows......some of this addresses Mully's question. Note also Gala's net debt, which I discussed with you privately recently. (enboldened).

".....Rank Group is in talks to acquire Gala Coral’s land-based casino business, paying up to £250m for the 24 venues across the UK.

Should the deal go through, Rank would become the largest land-based casino operator in the country ahead of current leader Genting, which has 45 venues in the country. The group currently has 35 Grosvenor Casinos, and last year announced plans to expand the chain to 45 venues by 2015.

The Grosvenor chain is Rank’s most profitable division, with an operating profit of £20.2m for H1 2011, and was responsible for around 42% of the group’s total revenues for the six months. In November last year the Court of Justice of the European Union ruled that Rank was entitled to £253.4m from HM Revenue and Customs, related to overpaid VAT on bingo games between 1973 and 1996.

Gala Coral currently has a net debt of £1.3bn, posting a £537.8m fourth quarter loss in December last year. This follows a complicated restructuring to lower the group’s debt in 2010, after which chief executive Dominic Harrison – now chairman of Microgaming’s Network Management Board – stepped down.

He was replaced by former Marks and Spencer’s director Carl Leaver in November 2010, who has since brought in former HBOS CEO Andy Hornby as managing director of Coral, Ladbrokes veteran John O’Reilly as Coral’s MD of interactive, and former PartyGaming COO Per Widerström as MD of Gala Interactive to lead the group. The group then closed its Eurobet.com brand at the end of September last year.

Gala Coral is also in the process of moving its online operations to Gibraltar, and is in the process of applying for a betting and gaming licences for Gala Bingo, Gala Casino and Coral Interactive.

Simon French of Panmure Gordon retained his firm’s ‘Buy’ recommendation, describing the potential acquisition as “an excellent strategic move.” French added that with the lack of other buyers, he would be “surprised if the transaction did not happen …”

However, City AM report that the discussions are at an early stage, and an announcement before Rank’s interim results on 9 February is unlikely....."

[tikay]

The Online side of Gala is not included in the proposal, & it's very difficult to see why they would want it.

Both Gala & Grosvenor/Rank have poorly positioned Online Poker products, their considerable strengths are elsewhere. Rank already own two competing rooms, being Blue Square & Grosvenor.com, both on i-Poker, who reported last week, iirc, that revenues were down 20% y-o-y. Gala chopped their "Eurobet" poker product last Autumn, I think, & there can be no logic to retaining them all except as part of a multi-media gaming platform. Of all the Online Poker resource in the 2 companies, only Blue Square has credibility, & much as many of us have an affection for Blue Square, the last I saw, numbers were small, & falling.

Online Poker is a mature market now in decline, & unless a specialist niche is identified, or as part as a m-m gaming platform, not worth the hassle for either Rank or Gala to waste management resource on, when, in Rank's case, they have a very successful B & M based business, more so if they take Gala & need to intregate it, & in Gala's case, they are in dire trouble & need to concentrate their energies on bailing out their sinking ship.

Expect plenty of blood on the carpet. A good deal for Rank, I would say, & as for Gala, any port in a storm.

[AdamM]

edit

I'll read the post above before I comment