THE co-founder of MTV, the pop-video television channel, is being tipped as the leading bidder for Hard Rock Cafe, the restaurant chain put up for sale by Rank Group, the British leisure company.
Robert Pittman, also a former chief operating officer of AOL Time Warner, the American media giant, is thought to be planning to buy the restaurant chain through his investment vehicle, Pilot Group.
He is one of a group of suitors for Hard Rock, which is famous for having its walls covered with rock-music memorabilia, including guitars and stage costumes. It has outlets in 40 countries, and sells 6m hamburgers a year.
Other contenders include the British private-equity groups Permira and TDR Capital, and the American buyout firm Apollo. Hard Rock is expected to fetch more than £500m.
The deadline for the next round of bids is November 6. Competition is “very intense”, according to one source involved in the auction.
Rank announced in July that it would carry out a strategic review of Hard Rock to find the best way to take the operation to a “new phase of its development”. It hired Merrill Lynch, the investment bank, to carry out the review. That process led to the current auction.
Pittman has long been associated with the music industry. He started his career at the age of 15, working as a disc jockey on local radio stations. He became programme director of an influential station in New York before making the jump into cable television and helping to launch the channel that would become MTV.
He left the channel, which turned the use of the pop video into an important promotional tool, in 1986 after a failed attempt to launch a buyout of the business from its parent company, Viacom.
He went on to join Time Warner in 1990, heading various divisions before leaving to run AOL, and rejoined Warner when the two companies merged in 2000. Pittman left two years later and in 2003 founded Pilot. He has since recruited several former colleagues from AOL.
Although Hard Rock is owned by a British company, most of its business is in America and analysts think it is likely the company will be bought by an American investor.
But that has not deterred the likes of Permira, which is trying to build its presence in the US, or TDR, which has experience of the restaurant sector after its investment in Gondola, owner of Pizza Express.
Hard Rock was founded in 1971 by American entrepreneurs Peter Morton and Isaac Tigrett. The first site opened near Park Lane in London - and is still famous for its constant queues of tourists — but the business did not begin its international expansion until 1982.
Rank first became involved in 1990 when it bought Mecca, which had previously acquired Tigrett’s interest in the chain.
The business is run today by chief executive Hamish Dodds. He is widely believed to be keen on staging a management buyout.
Rank’s new chief executive, Ian Burke, has been continuing the programme of asset sales begun by his Mike Smith, his predecessor. Since taking over last March, Burke has sold the Clermont casino in Mayfair, as well as various parts of Rank’s film-duplication business, Deluxe.
Once Burke has completed the disposals, Rank will be left as a stand-alone casino-and-bingo operator. Many leisure analysts think it would then become a bid target.
The Maidenhead-based group would be the last remaining quoted casino company in Britain, after the takeovers of Stanley Leisure and London Clubs International.
Rank shares closed at 248p on Friday, valuing the group at £1.4 billion. |
