Rank ready to sell Tom Cobleigh pubs

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The Independent Online

Rank, the leisure conglomerate, is close to agreeing the sale of its Tom Cobleigh pub chain to Electra, the venture capitalist.

Rank, the leisure conglomerate, is close to agreeing the sale of its Tom Cobleigh pub chain to Electra, the venture capitalist.

Although Rank paid £114m for the business in 1996 and has since almost doubled the size of the estate, the imminent deal is expected to cost Electra only £100m. Nevertheless, Rank chief executive Mike Smith will be delighted finally to rid himself of one of the most cumbersome legacies of his predecessor, Andrew Teare.

A sale of Tom Cobleigh has been predicted ever since Mr Smith took over last year, but the business has consistently failed to find a suitable buyer.

Mr Smith has already disposed of a number of businesses from Rank's sprawling leisure empire. Last October he sold Rank's nightclubs and bars division to Northern Leisure for £150m. In February, venture capitalist Cinven paid £280m for its Odeon cinema chain, and a consortium led by Michael Grade bought Pinewood Studios for £62m. In June, Rank sold its 50 per cent stake in a Florida theme park to an American investor for £185m. It is understood that Rank is now in talks over the sale of its holiday division, which includes Butlins and Haven, with privately owned Bourne Leisure Group. Approaches have also been made for its Hard Rock Café restaurant chain.

Mr Teare resigned from Rank in October 1998 following a disastrous slide in the company's share price. Although Mr Smith has refused to reveal details of his plans for Rank's future, it is believed they will centre on its casino and Mecca bingo divisions.

Broker Merrill Lynch recently upped its recommendation for Rank to accumulate from neutral. The shares closed on Friday at 165p, less than a third of its 1996 high of 545p.

Electra, chaired by Brian Williamson, last year survived a hostile takeover bid from fellow venture capitalist 3i. It has since embarked on a liquidation programme that has seen it buy two large tranches of shares back from investors.

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