A leading U.K. property developer has acquired a 9.3 percent stake in casino and bingo operator Rank Group, which last week sold a similarly-proportioned stake to Malaysia's Genting Berhad.
Richardsons Capital has invested in Rank through contracts for difference, or derivatives that allow holders to have an interest in a company without having direct ownership of the shares. While the shares can be converted to ownership at any time, Richardsons insists its investment, valued at £38 million, is not a takeover approach but a financial investment.
"I think Rank is grossly undervalued," Lee Richardson, director of the family-run group worth an estimated £4 billion, told the Financial Times. "It is a strong company and a strong brand. It was time to get the check book out. It's an investment decision and that's it."
Shares in Rank have fallen 57 percent this year after trading was hit by the smoking ban and tighter regulation of slot machines in the United Kingdom.
And for the better part of the second half, Rank has remained an 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 last Monday.
On the LSE, shares in Rank were up 3.75p, or 3.56 percent, to 109.00.