Mecca owner Rank Group in talks to buy online rival Stride

The owner of Mecca Bingo has confirmed it is in advanced talks to buy rival Stride Gaming.

Rank Group, which also owns Grosvenor Casinos, revealed it is nearing a deal to buy the online bingo and casino specialist for 151p per share.

The bid is at a 28.5% premium to the Stride share price before the offer, and values Stride at £114 million.

Stride, the third largest online bingo operator in the UK with brands including Kitty Bingo, told investors in February that it was looking at options to increase shareholder value, including a possible sale.

It announced the strategic review after shares more than halved from 220p a year earlier.

The potential deal also comes amid a strategic shift at Rank Group, as it looks to stem a slowdown in activity at its casinos and bingo halls.

Rank has significantly invested in its online operations over the past year in a bid to increase traffic and attract more young players.

Rank Group has until 5pm on June 28 to make a formal offer for Stride Gaming or walk away, under City regulations.

Both companies said: “There can be no certainty that this will result in an offer for the company, nor as to the terms on which any offer might be made.”

The potential deal comes as Stride revealed that revenues fell 13.5% to £36.6 million in the six months to the end of February compared with a year earlier.

Pre-tax profits for the period slid 32% to £2.6 million, as it was hit by the closure of its 8Ball Manchester operation.

Stride chief executive Eitan Boyd said: “The group has delivered a resilient performance in the first half of the year despite challenging trading conditions, reflecting the strength of our proprietary technology, as well as the skill and commitment of our team.”

Shares in Stride jumped 23.8% to 145.5p in early trading.