The turmoil at Rank Group over the bid from majority shareholder Guoco deepened on Tuesday when the gaming company announced its chief executive and finance director had resigned from the board with immediate effect.
Chief executive Ian Burke and finance director Paddy Gallagher have quit their positions but will remain at Rank to ensure “an orderly handover to their respective successors,” the company said in a statement.
The move comes a day after the Rank board for the second time changed tack on its approach to the 150p-a-share offer from the Hong Kong-based investment company.
The board had initially recommended that shareholders reject the offer when Guoco launched its bid on May 6, having taken its stake to 41 per cent.
Last week, the board switched to recommending the share offer.
But on Monday, it refined its advice, saying shareholders should weigh up the importance to them of whether or not Rank ended up retaining its listing status.
In its statement on Tuesday, Rank said that the view of Mr Burke and Mr Gallagher was that “given the feedback received from institutional shareholders since the announcement [on Monday], 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 Official List and the admission to trading of Rank’s shares on the London Stock Exchange’s main market for listed securities”.
Rank said the board would be convening urgently and make a further announcement shortly.
The board’s changing position was criticised by some institutional shareholders who were determined to keep their stakes.
Guoco, led by Malaysian billionaire Quek Leng Chan, has acceptances from shareholders that would give them 56.8 per cent of the company.
Shareholders have until Friday to decide whether to accept the Guoco offer.
James Hollins, analyst with Evolution Securitiies, said Mr Burke and Mr Gallagher “felt their positions had become untenable, notably given there remains the risk that more than 75 per cent of shares may be in the control of Guoco” by the end of the week.
He added that the resignations were likely to strengthen the case for shareholders to accept the offer.
Rank shares were down 0.2p to 149.7p, giving it a market capitalisation of £585.5m.