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Native American Hard Rock Cafe

Britain's Rank Group (RNK.L: Profile»») said on Thursday it had agreed to sell its Hard Rock cafe and casino business to the Seminole Tribe of Florida for $965 million.

However, business analysts»» said Rank had sold the division too cheaply. After the sale of its Hard Rock cafe and casino business, Rank's shares fell 4.6%. In addition, economic analysts were unimpressed by the balance of Rank's plan to return some of the sale proceeds to shareholders via a 65 pence-a-share
special dividend. »»

Rank's 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.""

In continuing their determination to get rid of its image as an old-fashioned corporation, Rank has previously discarded other popular British household names such as the amusement park Butlins, Odeon cinemas and Pinewood film studios.»»

Seminole Gaming, the main revenue earner for the Seminole Florida tribe, plans to expand the hotel and cafe business through key gateway cities around the world, and hopes to expand Hard Rock casinos brand»» internationally, but not in Britain.

The tribe is already involved with Rank, managing two Hard Rock casino-hotels in Florida. Gaming brings in about 90% of the revenues of the Seminole Tribe, which also produces citrus fruit, cattle and tobacco. Thursday'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.

"We realize the power and longevity of this brand," Seminole Gaming Chief Executive Jim Allen

Morgan Stanley analyst Lou Pirenc said the sale proceeds of 460 million were well below his estimate of 593 million.

A source close to the deal told Reuters the value of Hard Rock had been battered in recent weeks by the weakening of the dollar. Analysts at ABN Amro said: :The bulls will argue that such disposals put Rank even further in play (as an) industry consolidation target."

Rank said revenues had grown slightly in the previous 48 weeks, but Scotland's smoking ban in March had cut bingo revenues there by 15% and they're expecting a similar impact in England and Wales.


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