If the Rank Group has finally managed to sell its Deluxe film business then analysts see a possible takeover bid emerging in the not too distant future. It is believed that more than one company is interested in acquiring the leisure group whose assets include the 36 Grosvenor Casinos, 120 Mecca Bingos and the Hard Rock Casinos and Cafes around the world and an estimated worth in the region of £2 billion (US$3.5 billion). William Hill, which acquired the Stanley Leisure bookmaking estate in June this year, is tipped as a contender in a possible bidding war.

Ladbrokes, the gambling arm of the Hilton Group, is known to be anxious to regain a footing in the casino market. It too has been named as a likely bidder for Rank, as have BC Partners, a leading Pan-European private equity firm, and Reuben Brothers, the private equity, property and venture capital company that already holds a minor stake in Rank.

Over the last few years Rank has sold its Butlin’s and Haven holiday camps, Pinewood Studios, Tom Cobleigh pubs, Odeon Cinemas, its nightclub division, its games and slot machine businesses and its 50% stake in the Universal Studios Escape theme park in Orlando. In 2000 it was announced that Rank was planning to sell its Deluxe video services division, but was still seeking to demerge or sell off the film and media services business last September. As far back as November 1998 the Rank Group was said to be vulnerable to a takeover.

At the beginning of September this year, Rank reported interim revenue up by 15% and an operating profit increase of 1% but pre-tax profits as down by 2% - higher revenue, flat profits. The company says that the 2005 profit outlook for this year will remain flat. Talk of a bid to break up Rank is already increasing, with pressure from shareholders to unlock value. It would seem that Rank is ripe for such a move and its shares rose 5% on Friday in heavy trading. (E-11.14.05)

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