The GB Gambling Commission has given the Rank Group the approval they need in order to pass the proposed acquisition of Stride Gaming, the online casino and bingo operator.
Rank, operator of the Mecca Bingo and Grosvenor Casino, made an offer of £115.3m (€130.6m/$143.6m) to purchase Stride’s entire fully diluted share capital in May, but required approval from the UK regulator to proceed with the deal.
Following its clearance, Rank and Stride will be meeting next week for a hearing at the Royal Court of Jersey to finalise the acquisition. The hearing is due take place on 2 October.
Although it has been found that both parties have stressed the transaction conditional on the sanction of the Court, of the deal is to go ahead as expected, 3 October would be the final full day of trading for Stride’s shares.
Trading would be suspended the following day, with Stride having made an application to London’s Alternative Investment Market exchange. If granted, the shares would be removed from 7 October.
Stride has made an application to AIM to cancel the admission to trading of its shares on AIM, which is expected to take effect from October 7.
The Commission’s approval has come after Stride shareholders in July also voted in favour of the acquisition. A total of 96.43 per cent of votes cast backed the transaction, with just 3.57 per cent voting against the deal.
Upon tabling the offer in May, Rank said that the merger would create a business with genuine scale and capability in the digital market, with pro forma digital net gaming revenues of approximately £185m.
Rank have also said that the deal would improve its performance and also reduce costs through migration to Stride’s proprietary technology platform along with in-house ecosystem, as well as also enhancing management team with the addition of senior Stride staff.
In addition, Rank said that the merger would create significant value from strong synergies while also offering greater financial flexibility to the combined business.
Last month, Rank announced flat sales and a 22 per cent on year-on-year drop in operating profit in its annual figures, despite digital growth helping to drive an improved performance in the six months until June 30.
Operating profit has slumped to £39.0m from £50.1m within the year through to the end of June, while like-for-like revenue has fallen from £731.3m to £729.5m and statutory turnover edged up from £691.0m to £695.1m.