Mecca battle highlights necessity of Takeover changes

Author: Gemma Varriale | Published: 22 Jul 2011

The highly unusual solution offered by the Takeover Panel in the drawn out saga of Rank, the Mecca bingo hall owner, has highlighted the importance of the incoming changes to the City Code.

The dramatic intervention by the Takeover Panel on July 1 followed an increase of Guoco’s stake in Rank to above 30 %. Under the UK Takeover Code, this triggered a mandatory bid and required the Hong Kong-based investment firm to submit an offer to buy the group.

Problems arose when a number of shareholders offered their shares to Guoco. This raised the prospect that Guoco would own more than 75% of Rank and the shares would be delisted.

According to Scott Hopkins, a London-based counsel at Skadden Arps, the Rank result highlights the importance of the changes being made to the Takeover Code, specifically the rules requiring bidders to set out their intentions with regard to the maintenance of any...