Britain's Rank Group has agreed to sell its Hard Rock cafe and casino business for $965 million to the native American Seminole tribe of Florida, which already makes 90 per cent of its revenues from gambling.
Rank said yesterday that the sale of the rock music-themed chain would leave the company as a pure gaming group, focusing on Britain's plans to open up its casino market from next year.
But analysts said it had sold the division too cheaply after the price was hit by the weakening dollar, and Rank's shares fell. Analysts were also unimpressed by the scale of Rank's plan to return some of the sale proceeds to shareholders via a 65 pence-a-share special dividend.
Rank chief executive Ian Burke said: "Our strong portfolio of gaming assets will enable us to take advantage of the long-term growth in the gaming market."
Rank has shed British household names such as Butlins holiday camps, Odeon cinemas and Pinewood film studios in a drive to get rid of its image as an old-fashioned conglomerate.
Seminole Gaming, the main revenue earner for the Florida tribe, plans to expand the hotel and cafe business through key gateway cities around the world and hopes to expand Hard Rock casinos internationally, but not in Britain.
"We realise the power and longevity of this brand," said Seminole Gaming chief executive Jim Allen. Nearly 3,300 Seminole Indians live in Florida reservations, descendants of a few hundred that escaped US government attempts to relocate them in the mid-1800s.
Besides earning money from gambling, the Seminole tribe also produces citrus fruit, cattle and tobacco.
The tribe is already involved with Rank, managing two Hard Rock casino-hotels in Florida.
Yesterday's deal includes 124 Hard Rock Cafes as well as hotels, casino hotels and two Hard Rock Live! concert venues. It also includes Hard Rock's collection of rock memorabilia, which fronts its cafes - including a David Bowie Fender guitar and Madonna's black lace bustier.
"There was a significant amount of interest, a significant number of parties," Mr Burke said of the Hard Rock auction. But Rank shares closed down 4.1 per cent at 255½ pence, valuing the group at around £1.4 billion pounds ($2.8 billion).
