GC grants approval to Rank Group’s acquisition of Stride
The GB Gambling Commission has given its approval to Rank Group’s proposed acquisition of online casino and bingo operator Stride Gaming.
Rank, operator of the Mecca Bingo and Grosvenor Casino, in May made an offer of £115.3m (€130.6m/$143.6m) to purchase Stride’s entire fully diluted share capital, but required approval from the UK regulator to proceed with the deal.
Followiing this clearance, Rank and Stride will next week meet for a hearing at the Royal Court of Jersey to finalise the acquisition. The hearing is due to take place on 2 October.
Although both parties have stressed that the transaction remains conditional on the sanction of the Court, should the deal go ahead as expected, 3 October would be the final full day of trading for Stride’s shares. Trading would be suspended the following day, with Stride having made an application to London's Alternative Investment Market exchange. If granted, the shares would be removed from 7 October..
Stride has made an application to AIM to cancel the admission to trading of its shares on AIM, which is expected to take effect from October 7.
The Commission’s approval comes after Stride shareholders in July also voted in favour of the acquisition. A total of 96.43% of votes cast backed the transaction, with just 3.57% against the deal.
Upon tabling the offer in May, Rank said that the merger would create a business with genuine scale and capability in the digital market, with pro forma digital net gaming revenues of approximately £185m.
Rank also said the deal would improve its performance and reduce costs through migration to Stride’s proprietary technology platform and in-house ecosystem, as well as enhance its management team with the addition of senior Stride staff.
In addition, Rank said that the merger would create significant value from strong synergies and offer greater financial flexibility to the combined business.
Last month, Rank announced flat sales and a 22% year-on-year drop in operating profit in its annual figures, despite digital growth helping to drive an improved performance in the six months until June 30.
Operating profit slumped to £39.0m from £50.1m in the year through to the end of June, while like-for-like revenue fell from £731.3m to £729.5m and statutory turnover edged up from £691.0m to £695.1m.