Hard Rock Sold to Seminole Tribe of Florida for $965mil
LONDON, UK, December 7, 2006. The Rank Group in the UK has reached an agreement with the Seminole Tribe of Florida, to sell the Hard Rock business for US$965 million (lb490 million).
Seminole already owns hotels, casinos and holidays resorts in Florida. However, by buying the Hard Rock Cafe business it becomes the owner of one of the best-known international restaurant brands and the proprietor of more than 120 outlets in 40 countries. The first Hard Rock Cafe, which was opened in London in 1971, will remain the property of Rank however, the British gaming and leisure group said.
Following the completion of this transaction, Rank intends to return lb350 million (equivalent to approximately 65p per share) to shareholders through payment of a special dividend, and to effect a share consolidation.
Commenting on the Disposal, Ian Burke, chief executive of Rank said, 'Today's announcement sets a clear strategic course for Rank as a focused gaming business. We have maximised the value of Hard Rock through this disposal following a thorough strategic review and competitive auction. We intend to return lb350 million of the proceeds to shareholders, reflecting the ongoing capital requirements of the Group. This will bring the total amount returned to shareholders since March 2006 to lb625 million, including dividend payments.
'We have established clear plans to capitalise on the changes taking place in UK gaming in order to generate sustained growth in profits and improvements in our return on capital employed. In spite of a number of near-term challenges, we believe that our considerable operating experience and our strong portfolio of gaming assets will enable us to take advantage of the long-term growth in the gaming market.
'In recent months we have made progress on the key strategic objectives that we highlighted at the time of our interim results: completing the review of Hard Rock, exiting non-core businesses, restructuring our balance sheet, generating overhead and operating efficiencies and driving operational improvements from our gaming businesses. We believe that this strategy is in the best interests of our shareholders.'
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