Malaysian billionaire Quek Leng Chan’s Rank Group is already the UK’s second-largest operator
The acquisition of the casino arm of the gambling firm Gala Coral by Malaysian billionaire Quek Leng Chan’s Rank Group has been referred to the Competition Commission for scrutiny.
With 34 casinos trading under the Grosvenor and GCasino brands, Rank is already the UK’s second-largest operator. Only Genting, run by Lim Kok Thay, the scion of another Malaysian billionaire dynasty, is larger. The addition of Gala casinos would add a further 23 sites, giving Rank a commanding 40% share of UK casinos. The group also holds licences for further casinos, as does its controlling shareholder, Quek’s conglomerate Guoco.
If Rank’s takeover of Gala casinos goes ahead, the two Malaysian groups will together control 75% of UK casinos.
For many years the ownership of the stock market-listed Rank was fought over by competing Malaysian interests – Quek’s Guoco and Lim’s Genting. Genting became Britain’s largest casino operator in 2006 when it acquired Stanley Casinos. Guoco tried sought to apply for its own casino licences but after limited success started to acquire shares in Rank. Fearing Quek would take control of Rank, Genting swooped on shares, taking a large stake overnight in what appeared to be an attempt to thwart the takeover ambitions of Guoco.
The two Malaysian groups interest on Rank’s share register appeared to be in deadlock until last year when Genting seemed to surrender its interest in Rank to its arch-rival without a fight. Lim’s group sold its 11.6% stake – big enough to block a Guoco takeover – to Quek’s empire in a near nil-premium deal, baffling many analysts and industry experts.
That took Guoco’s stake to over 40%, triggering a mandatory takeover. Despite advice to the contrary from Rank directors, many smaller shareholders sold out – again without receiving a takeover premium – leaving Guoco with a stake of 74.5%.
The Office of Fair Trading said: “Rank and Gala are two of only three large national casino operators in the UK. This merger would represent a major consolidation, which could be expected to reduce competition, both locally and nationally. The high barriers to entry and expansion in the casino sector mean the loss of competition could potentially be irreversible.”