Rank outpaced in race to bag Coral

RANK, owner of the Hard Rock Cafe and Mecca casino chains, has been outbid by a venture capitalist group in the race to buy Coral Eurobet, Britain's third-largest chain of bookmakers.

Charterhouse Development Capital claimed victory with its £860m bid for Coral. But the real winner is the vendor, Morgan Grenfell Private Equity, which bought Coral from Ladbroke in 1998 for £390m.

Morgan Grenfell's financial adviser, Adrian Fisk of Lehman Brothers, said his clients were extremely happy: 'They are delighted with the price - it has been a great investment for them.'

But he denied that the new owner would be unable to match Morgan's profit, and claimed it could also double its money in three years.

Larger competitors William Hill and Ladbroke are constrained by competition issues but Coral, with just 870 shops, has room to acquire hundreds more.

A company spokesman said management was 'delighted' that Charterhouse had won. Many managers might have lost their jobs had Rank taken over but the deal, signed at midnight, has been structured as a management buyout. Chief executive Bob Scott, a Morgan appointee, will step down in favour of Coral's managing director Vaughn Ashdown.