The Seminole Tribe operates two Hard Rock casinos in Florida under a licence agreement with Rank Group, one of Britain’s leading gaming operators. In July this year Rank announced that investment bank Merrill Lynch would undertake a review of Hard Rock, with over one hundred restaurants and a number of hotels and casino franchises around the world. It has been reported that the Seminole Tribe has bid US$1 billion for the Hard Rock Café chain.
It is believed that private equity groups, including Permira, TDR Capital and Apollo Management, have previously made bids but that the Seminole bid is the highest. Rank is likely to retain the Hard Rock brand under a licensing deal if the business is sold. The Merrill Lynch review is assessing the potential strategic options for Rank’s Hard Rock operations.
The Hard Rock Hotel & Casino in Las Vegas, which is not part of Rank Group, was sold by Peter Morton in May to Morgans Hotel Group. Last week Morgans announced that DLJ Merchant Banking Partners would become a joint venture partner for the US$770 million acquisition. Hard Rock owns the world’s largest collection of rock music memorabilia since the first Hard Rock Café was opened in London in 1971 and Eric Clapton and Pete Townshend donated electric guitars.
Last year over 5.6 million Hard Rock branded t-shirts and 1.5 million Hard Rock pins were sold. In preliminary results for 2005 released in March 2006, Rank showed Hard Rock operating profit up and remarked on the increasing importance of Hard Rock hotel/casino revenues. The company was also said to be looking actively beyond the UK and USA for Hard Rock development, and called it ‘a big and growing brand’. The disposal of Hard Rock follows the sale of a procession of Rank leisure assets in recent years, including Butlin’s, Odean Cinemas and Pinewood Studios. (E-11.15.06)
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