Harrah's Taking Another Run At Rank PLC?

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Published: Monday, December 24, 2007 https://www.gowanbo.cc

Newly appointed advisers could herald another approach

Despite its unsuccessful attempt last month to get a 28 percent slice of UK gambling group Rank plc it appears that the US gambling giant Harrah's Entertainment is about to take another run at getting in on the action.

This may have something to do with the subsequent involvement of Malaysian gambling firm Genting and British property group Richardson Capital, both of which have secured a foothold stake in the company totaling around 18 percent.

The Telegraph nespaper is now reporting that Harrah's has appointed advisers to "explore strategic options in the European gambling market", including a potential bid for UK land and online casino and bingo group Rank.

Harrah's owns London Clubs International, a UK casino operator, and has appointed Morgan Stanley and Rank's former broker, Deutsche Bank, to review its European options.

Harrah's is itself the subject of a $17.1billion takeover deal by private equity groups Apollo and TPG in the United States, and is not expected to make any immediate move. The Harrah's takeover is expected to complete shortly.

Rank, which is currently on a valuation of just over GBP 350 million, rejected an earlier offer from Harrah's, along with a bid for its bingo operations from Duke Street Capital. Harrah's had proposed injecting the majority of London Clubs' casinos into Rank in return for a stake of around 28 percent in the combined group.

Harrah's and Genting tussled over London Clubs, which the US operator acquired in August 2006 for GBP 279 million. At the time Genting held a 28 percent stake in London Clubs, but decided to sell to Harrah's rather than launch a counter bid.

One analyst said: "Whatever happens, this is the beginning of the end for Rank."

Morgan Stanley and Deutsche's remit extends to examining opportunities if the Government reintroduces legislation for an additional 16 casinos in Britain. The two banks are also reviewing opportunities for Harrah's in mainland Europe.