Long-troubled gaming operator Rank Group on Friday finalized the exclusive transfer of its £700 million pension scheme to financial firm Goldman Sachs, marking the largest UK transaction of a publicly traded company’s pension scheme.
The buyout, completed by Goldman insurance subsidiary Rothesay Life, marks the conclusion of a five-month review by Rank. The gaming operator said last September that it was closing the scheme to new members and was considering options for its future. Rank began talks with Goldman in January.
Rothesay will take on all of Rank's scheme liabilities, with all risk passed to the specialist insurer. Goldman Sachs ultimately will stand behind any problems that may arise.
Rank expects to collect a £20 million payment at the close of the deal as a result of the surplus in the scheme. Furthermore, Rank will no longer be required to make its remaining contributions toward a total £30.8 million into the pension fund, which it had agreed to do after its sale of Deluxe Film Services in 2006.
The group expects the deal to be completed by June 2008, pending clearance by HM Revenue and Customs.
Rank Finance Director Peter Gill told the Times that Rothesay's proposal was the “best outcome for all concerned”. The Rank scheme has 19,000 members, with 10,000 of them already retired.
in Rank fell 57 percent in 2007 after trading was hit by the smoking ban and tighter regulation of slot machines in the United Kingdom.
And for most of the second half of the year Rank has remained the on-again, off-again subject of takeover rumors, having in late November rejected an all-share buyout offer from U.S. casino giant Harrah's and offloaded a 9.38 percent stake to Genting in December.
Shares in Rank were up 3.50p to 94 upon today's announcement.