$1 Billion Deal for 'Rank' and 'Seminole'

European entertainment company Rank formally announced that it has agreed to sell its Hard Rock chain of cafes to the Seminole Tribe of Florida for $965 million. The deal will not include Hard rock Hotels and casinos, which will soon be owned by boutique lodging operator Morgan Hotel group for $770 million in cash.

Hard Rock's portfolio includes 124 Hard Rock Cafes, 4 Hard Rock hotels, 2 Hard Rock casino-hotels, 2 Hard Rock Live! concert venues and equity stakes in three unbranded hotels.

The Rank Group is a leading leisure and gaming company operating in 40 countries worldwide. It is currently valued at 1.4 billion pounds. The group’s businesses include Mecca Bingo, Top Rank Espana, Grosvenor Casinos, Blue Square and Hard Rock.

In its official announcement, Rank stated that the decision was brought about by a need to re-energize its gaming business, establish a better operating and cost structure and exit Deluxe Media Services.

Rank has been experiencing revenue decline because of the introduction of the smoking ban in Scotland which has caused admissions to fall 6 percent and spend slide 9 percent since the ban. Rank shares fell to 3 percent to 258 pence as of last closing date.

"We do expect a similar impact in England and Wales," Chief Executive Ian Burke said of a smoking ban planned there from the middle of next year.

Burke also stated that Rank has established clear plans to capitalize on the changes taking place in the UK gaming industry in order to generate sustained growth in profits and improvements in their return on capital used.

Seminole has increasingly been becoming a dominant gambling force in Florida. The tribe has been locked in a legal battle with the Internal Revenue Service because of the illegal tax-free bonds it has been reportedly issuing.