Rank Group Can Continue Its Acquisition of Stride Due To Approval Of UKGC

Rank Group’s proposed acquisition of online casino and bingo operator, Stride Gaming, has received the approval of the UK Gambling Commission. The operator of Mecca Bingo and Grosvenor Casino made an offer in May of £115.3m (€130.6m/$143.6m) to purchase Stride’s entire fully diluted share capital.

However, it required approval from the UK regulator to proceed with the deal. Since the regulator has given its sign of approval, the companies will meet next week for a hearing at the Royal Court of Jersey, in order to finalize the acquisition. The hearing is scheduled for 2nd October.

Should the deal go ahead as expected, 3rd October would be the final full day of trading for Stride’s shares. Both parties have stressed that the transaction remains conditional on the sanction of the Court.

Trading would be suspended the following day, with Stride having made an application to London’s Alternative Investment Market exchange. If the brand gets consent, its shares would be removed from 7th October.

Majority of Shareholders Voted in Favor of the Acquisition

The approval by the UK Gambling Commission comes after Stride’s shareholders voted in favor of the acquisition in July. A total of 96.43% of votes ed the deal, while only 3.57% were against it.

Stride has been a leading online gaming operator since its inception in 2012. It operates a multi-branded strategy by combining proprietary technology and licensed software – all for the purpose of providing bingo, casino, and slot gaming to the players.

The company is focused on the UK gambling market. It offers a diverse portfolio of over 150 brands and over an 11% share of the online bingo-led casino landscape. It’s no wonder why this brand caught an eye of Rank company, who recognized its quality.

Rank Group Expects Many Benefits from this Deal

Upon tabling the offer in May, Rank said that the merger would create a business with a genuine scale and capability in the digital market. With expectation that pro forma digital net gaming revenues will reach approximately £185m.

The company also believes that this deal would improve its performance and reduce costs through migration to Stride’s proprietary technology platform and in-house ecosystem. With the addition of senior staff, the brand expects enhance of its management team, which is especially important since its managing director left the brand in April.

In addition, the operator of Mecca Bingo and Grosvenor Casino also states that the merger would create significant value from strong synergies and offer greater financial flexibility to the combined business.

Despite digital growth helping to drive an improved performance in the six months until June 30, last month, the company announced flat sales and a 22% year-on-year drop in operating profit in its annual figures

Operating profit slumped to £39.0m from £50.1m in the year through to the end of June. Like-for-like revenue also fell from £731.3m to £729.5m, while statutory turnover edged up from £691.0m to £695.1m.

Source:

“GC grants approval to Rank Group’s acquisition of Stride”, igamingbusiness.com, September 23, 2019.