Rank Rises on Speculation Bingo Company May Be Bought (Update 1)

2007-10-23 11:55 (New York)

By Hamish Risk and Louisa Nesbitt

Oct. 23 (Bloomberg) -- Rank Group Plc rose 2 percent in London trading on speculation the second-largest owner of U.K. bingo halls may be bought by a rival.

The Maidenhead, England-based company may be an``attractive bid target'' for Ladbrokes Plc and William Hill Plc, Britain's biggest bookmakers, Dresdner Kleinwort analysts said in a research note published yesterday. A takeover may lead to ``significant'' cost savings, Dresdner said.

Rank cut its profit forecast on Oct. 12 after sales at British bingo clubs and casinos suffered following a ban on indoor smoking in England. The shares have fallen 55 percent this year, reducing its market value to 392 million pounds ($803 million). Rank shares climbed 2 pence to 100.5 pence.

Ladbrokes spokesman Ciaran O'Brien declined to comment. A spokeswoman for William Hill and a spokesman for Rank also wouldn't comment. They asked not to be identified.

The company's credit-default swaps, used to protect debt from default or speculate on credit quality, fell 50 basis points to 400 basis points today, according to Deutsche Bank AG. Credit-default swaps fall as perceptions of credit worthiness improve.

--Editor: Jarvis (mno)
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To contact the reporter on this story:Hamish Risk in London (44) 207 673 2928 or hrisk@bloomberg.net;Louisa Nesbitt in Dublin at +353-1-402-9443 or lnesbitt@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin in London at (44) 20 7673 2467 or gserkin@bloomberg.net Keith Campbell at +44-20-7073-3829 or k.campbell@bloomberg.net.