The implications of the Deluxe sale are beginning to sink in. Everyones got their calculators out to see - as the clouds settle - Rank's new worth. The price for Deluxe was about expectations; and bid premium has been built into the price for a while now.
Whilst Rank are guaranteeing the next divi, it's obvious that there will not be sufficient cover for subsequent divis (even when a big chunk of debt is paid off).
Some off the proceeds will go towards the pension fund shortfall (although the shortfall itself wasn't too big a problem; Rank switched to a cheaper scheme for it's employees about five years ago, averting what could have been a worse problem now).
Personally, I wouldn't be keen on Rank returning some proceeds to shareholders; I'd sooner see debt significantly reduced and the remainder invested in the business. Short-term fillips don't cut much ice with me; it would show a lack of ambition by the board.
So what now?
Rank is definitely a prime target, but the share price is already relatively full (off-putting William Hill a month ago; although they could be back). There will be a period of doldrums I reckon; there's only one further episode left with this once great company; and I want to be there when it happens. I believe they'll be a bid but not for a huge premium, but justifiably worth waiting for when it happens.
These shares are a HOLD. I maintain my 300-310p valuation until a bid comes along.
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