Peter Morton, one of the co-founders of the Hard Rock cafe chain, and his partners yesterday landed a $410m (pounds 266m) windfall after Rank announced a deal to buy out the remaining world-wide rights in the business.
The acquisition is the first by the bingo halls to film group since Andrew Teare, formerly of English China Clays, took over as chief executive in April. It will take Rank's Hard Rock outlets to 58 and give it exclusive rights to develop the name in the US west of the Mississippi, Australia and parts of South America, as well as other less lucrative parts of the world.
The way was cleared for the acquisition by the resolution earlier this year of a legal dispute between the two sides which has been rumbling for several years. Rank appointed a new president, Jim Berk, for Hard Rock in March.
The latest announcement came after the market closed yesterday. Rank's shares had earlier ended the day 6p down at 500p.
Describing Hard Rock as "a terrific global brand which really travels the world", Mr Teare said the deal paved the way for aggressive expansion of the chain. "Both parts of Hard Rock have plans for cafe openings next year. Now the split in the brand is over, we can develop the business very rapidly."
Over the next 12 months, Rank plans to open seven new outlets in the US ranging from Niagara Falls to Hawaii. The business is also to be developed into new business areas, including a Hard Rock record label whose products will be sold in the cafes. Rank has also just announced the first Hard Rock Live at Universal Studios in Florida, which will incorporate a 2,000- seat auditorium for rock concerts alongside a 500 to 600-seat cafe.
It is a far cry from the first restaurant in Piccadilly, which will celebrate its 25th anniversary next Friday with hamburgers on sale at 1971 prices. The original team of Mr Morton and Isaac Tigrett split up in 1982, later agreeing to run two parallel chains under the Hard Rock name before Mr Tigrett sold out to Pleasurama in 1988. Rank ended up with Mr Tigrett's side of the business in 1990 after its pounds 950m takeover of Mecca Leisure, the bingo group which had earlier acquired Pleasurama.
The acquisition, which adds a further 13 owned cafes and four franchises, will result in a goodwill write-off of $380m (pounds 247m) and raise gearing at Rank from 21 per cent to 40 per cent. Operating profits at the acquired business were $26m, compared with $66m in the existing Hard Rock operation.
Under the terms of yesterday's deal, Mr Morton will continue to operate the Hard Rock Casino in Las Vegas under licence. He said yesterday he was continuing to actively seek further casino, hotel and other gaming opportunities in the western part of the US.
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