Rank Group Plc (RNK.L) said Wednesday that it has now agreed terms with Gala Coral Group Ltd. for the purchase of 19 of the 23 casinos originally comprised within the original agreement, announced in May 2012 as well as the three non-operating licences also comprised within the original agreement.
Rank said it and Gala Coral have entered into a revised conditional agreement for the acquisition of Gala Casino 1 Ltd., which owns the assets to be acquired by Rank, for a total cash consideration of £179 million. The consideration will be subject to customary adjustments for, among other things, the amount of cash, debt and working capital in Gala Casinos at completion of the Amended Acquisition.
The amended acquisition, which is expected to be completed in the second quarter of the 2013 calendar year, is conditional, amongst other things, upon the Competition Commission having formally accepted undertakings from Rank and Gala Coral, Rank disposing of its non-operational licence in Edinburgh to a purchaser approved by the Competition Commission, Rank having in place third party financing and Gala Coral being in receipt of certain lender consents.
Gala Coral's casinos in Aberdeen, Bristol, Cardiff, Stockton-on-Tees and Gibraltar, its non-operating licences for the City of Westminster, London, and Dundee, its branded online casino activities and all of the central management functions previously associated with Gala Coral's casino business are not included in the scope of the amended acquisition.
The sale and purchase agreement entered into for the purpose of the amended acquisition contemplates the transfer of about 2,220 Gala Casinos' employees to the Rank Group.
Acquiring the Gala Casinos business is expected to be earnings enhancing for Rank in the first full financial year.
On May 12, 2012, Rank announced that it had conditionally agreed to acquire Gala Casinos Ltd. from Gala Coral. That conditional agreement envisaged Rank purchasing 23 casinos and three non-operating casino licences. Rank shareholder approval for the proposed acquisition was obtained at a general meeting of Rank held on July 26, 2012.
In August 2012, the Office of Fair Trading referred the Proposed Acquisition to the Competition Commission for an in-depth merger review and, as a result, the original agreement lapsed. On February 19, 2013, the Competition Commission published its final report following its review of the Proposed Acquisition.
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