Rank Group has sold its Hard Rock division to a Florida-based tribe of Native Americans for US$965m (£490m).
The deal with Seminole Tribe of Florida, which has made its money through gambling and casino ventures in America, transforms Rank Group from a diversified leisure group into an exclusively gaming business.
Chief executive Ian Burke said the sale of its Hard Rock division would help it tap into the long-term growth of the UK gaming market. He said: "Today's announcement sets a clear strategic course for Rank. We have established clear plans to capitalise on the changes taking place in UK gaming."
The Hard Rock division includes 124 Hard Rock Cafes, four hotels, two casino hotels, two concert venues and equity stakes in three unbranded hotels. Last year it made a pre-tax profit of £34.8m on the back of £250m turnover.
Rank will return £350m to shareholders when the deal goes through.
Meanwhile, Rank has announced that chairman Alan Cathcart will be replaced by Peter Johnson on 1 March 2007. Johnson moves from his role as chairman of car sales group Inchcape.
In a trading statement issued today for the 48 weeks to 26 November 2006, Rank said the performance of its Mecca Bingo division had been held back by the smoking ban in Scotland, which came in on 26 March. Year-on-year turnover has fallen by 15% across the estate as a result.
Rank said sales were up 6% at its Hard Rock division in the year to date.
By Tom Bill
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