Malaysian casino group Genting Berhad has acquired a 9.38 percent stake in U.K.-based casino and bingo operator Rank Group, for which the latter half of 2007 has been a turbulent period.
Rank in October issued a profit warning advising that its full-year operating profits would be "significantly lower than in 2006" -- when it achieved profits of £77.4 million -- due primarily to new U.K. laws covering smoking and gaming terminals.
Just last Monday, Rank rejected an all-share buyout offer from Harrah's Entertainment; by Thursday, however, rumor surfaced of a renewed all-cash offer from the U.S. casino giant.
Analysts believe that Genting could use its newly-acquired holding to pursue a takeover of Rank, but media reports suggest the acquisition may spark a bidding war among some of the top bookmakers, such as Ladbrokes and William Hill.
Genting bought casino group Stanley Leisure in September 2006 for £639 million, making it the largest casino operator in the United Kingdom, with 47 venues. A full takeover of Rank would give it control of about 80 of the United Kingdom's 140 casinos.
Rank's stock rose 8.75p, or 8.71 percent, on this morning's announcement. It is expected to release a trading statement for the 49 weeks to Dec. 9, 2007 on Dec. 12.