Rank may have to sell five casinos and a “cold” licence to obtain regulatory clearance for its takeover of Gala Casinos, the UK’s competition body announced today.
The companies’ previously agreed £205m deal for Rank to buy 23 of Gala’s casinos lapsed in September after the Competition Commission opened an investigation into the merger’s potential to result in an “irreversible” loss of competition in the UK’s bricks ‘n’ mortar casino market.
However, with Rank and Gala still pursuing the deal, the competition body today published a preliminary ruling that Rank would need to sell its own or be prohibited from acquiring Gala-owned casinos in five areas of the UK in order to alleviate the competition concerns of the Commission and be allowed to complete the deal.
The Mecca Bingo and Blue Square owner would also need to find a buyer for a currently non-operational or “cold” licence it holds in Edinburgh, “which would likely be developed into a competing casino in the absence of the merger”, said the CC.
The CC noted today that following the merger, “there would be only two large national casino operators”, Rank and Malaysian-owned Genting, which currently operates 44 bricks ‘n’ mortar casinos in the UK.
Rank’s originally proposed acquisition of 23 casinos and three currently non-operational licences from Gala would have seen Rank’s Grosvenor Casinos chain grow to 57 properties, transforming the London-listed group into the UK’s largest casino operator.
Rank and Gala have yet to issue a statement on today’s preliminary ruling by the CC.
The CC is set to publish its final report by 20 February 2013.
Article written by Stephen Carter