News INTERNATIONAL UPDATE Rank prepare Gala takeover
The fickle romance of the UK’s Gala and Rank appears at an end with a takeover imminent
Private equity-owned gambling group Gala Coral has confirmed it will sell its casino business to British bingo and casino operator Rank for £205m.
At the end of March, Rank said it had ended talks to buy Gala's casino division as the terms of the proposed deal were not beneficial to it.
Rank, which is 74.5 per cent-controlled by Malaysia's Guoco Group, currently operates 35 casinos and 103 bingo halls in Britain. The deal would see Rank become Britain's biggest casino operator. It would include the purchase of 23 UK- based casinos and three non-operating licences to Rank. The transaction excludes the casinos in Dundee and Gibraltar, the non-operating licence for the City of Westminster (London), the divisional and central management functions associated with Gala Casinos Limited, the branded online casino activities and the casino freehold properties owned by Gala Propco Three Limited. Under Rank’s ownership, Gala Casinos Limited will remain the tenant of these freehold properties.
The LTM turnover and the LTM club-level
Magna founder out in Austria bid
The re-allocation of casino licences in the Austrian casino market has seen the billionaire industrialist and founder of Magna, Frank Stronach, lose out in his bid for the so-called ‘land package’ - six casinos spread across Carinthia, Lower Austria, Tyrol, Vorarlberg and Salzburg. Mr. Stronach intended to bid for a location in Ebreichsdorf, where he planned to build a casino operation within his Magna Racino. However, according to the Austrian press, Mr. Stronach ended his bid by pulling out of the specifically established Mercury Entertainment company, which was a joint partnership formed with the Gauselmann Group and City Casino Baden. Only two bidders remain in the running for the licences, Casinos Austria and Novomatic.
“Under Rank’s
ownership I am sure that the business will
continue to go from strength to
strength. This
transaction will crystallise
significant value for our shareholders
and debt investors.” CARL LEAVER, Group CEO, Gala Coral.
EBITDA of the casinos being sold were £125.9m and £25.7m respectively for the 12 months ended 7 April 2012.
On completion, Gala Coral will receive cash consideration of £182.5m. Rank will pay a further £22.5m into escrow which will be released to Gala Coral in stages between completion and August 2015 on satisfaction of certain conditions relating to taxation, pensions and other contingent liabilities. Gala Coral has not taken a final decision on the use of proceeds, although it expects to reduce the Group’s leverage. The takeover of the casinos is conditional on approval by Rank's shareholders and the receipt of UK merger control clearance.
Milford casino plan moves forward as Foxboro axed
With a proposal to build a resort casino in Foxborough Massachusetts coming to a halt, plans for a Milford casino have skipped out in front.
“I am optimistic that we will have a great team put together. That’s what I am working on now,” said Colorado-based developer David Nunes. Mr. Nunes hopes to build a $700m, 300,000sq.ft. casino at the junction of Rte. 16 and Interstate 495.
Mr. Nunes said that he and his team are putting together a financing plan. He said when he makes his next announcement to selectmen, “We’re going to be set, ready
June 2012 PAGE 22
to go and fully financed. There won’t be any questions about our capabilities.”
Mr. Nunes said the suspension of the casino in Foxborough was anticipated by anyone who was close to what was going on with casinos in Massachusetts. He said with Foxborough out of the picture there is now going to be very limited competition to build a casino in eastern Massachusetts.
The biggest competition is coming from developers who are eyeing the Suffolk Downs racetrack in East Boston as another potential casino site for the region.
US CASINO GIANT MGM RESORTS HAS said it wants to build the proposed casino being debated for development in Toronto, saying it wants to bring a glamorous Las Vegas style resort akin to the Canadian city. Alan Feldman, senior vice-president of public affairs for MGM Resorts International, said: “Toronto has enormous appeal in terms of its cultural diversity, in terms of its entertainment diversity, its physical attributes. It is an incredibly beautiful city; its location along the water gives it added appeal. It also has a great tourism infrastructure. There is enormous opportunity in Toronto to do something that is truly spectacular.” Feldman added that the project would have to be large scale with the MGM vision being for a ‘destination resort’ with a casino being just one element alongside hotels, restaurants, nightclubs, spas and exhibition space.
The operator would not be interested in developing a more modest project, such as turning the Woodbine slot racino into a fully-fledged casino with table games. “In our model, casinos are a means unto the end. They are not the end themselves. If that is the kind of conversation that the councillors are willing to have, we’d love to participate,” Mr. Feldman added. “If all that is wanted is a casino there are plenty of other companies that will do that. We are really trying to have a conversation about something that is much more than that.” Whilst saying any decision on location was very much up to the politicians, Mr. Feldman hinted that the hospitality industry as a whole would favour a waterfront destination such as Ontario Place. MGM’s interest comes as Toronto debates the pros and cons of a large resort style casino. Analysis suggests that a downtown Toronto casino could generate US$4bn each year and create 4,000 new jobs.
AMERICAN GAMING SYSTEMS HAS been granted a license to manufacture and distribute Gaming Devices in the state of Nevada and to Operate a Slot Machine Route. Upon receiving all the appropriate regulatory approvals, AGS’s Gaming Devices will be powered by its revolutionary new Roadrunner platform. With its proprietary 3-D graphics engine that features an accelerated video frame refresh rate, Roadrunner produces crystal- clear graphics and superior game-play features for all players. In addition to introducing dynamic new content in the video game segment, AGS will also launch their thrilling new Top Box feature games.
Bob Miodunski, AGS’ President and CEO, said: “AGS took another major step forward today. Nevada is clearly a state that has tremendous opportunities for AGS and we are extremely excited to introduce our Roadrunner platform on the world’s biggest stage in the gaming industry.”
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