Coral, the UK's third largest betting chain, has been sold for �860m ($1.3bn) to the private equity firm Charterhouse Development.

The move ends months of speculation over the future ownership of the gambling chain, with Rank and Stanley Leisure both having been tipped as potential purchasers.

The race for Coral was closely fought

Coral operates 870 shops and runs the Eurobet internet betting business.

Its owners, Morgan Grenfell Private Equity (MGPE), put the chain up for sale in May after deciding not to float it on the stock market.

MGPE bought Coral from rival betting firm Ladbrokes for �390m in 1999.

Ladbrokes had bought Coral from Bass, but was forced to sell the chain by the UK competition authorities.

The new deal is subject to approval by the European Commission.

Opportunity knocks

The betting industry has been seen as a growth sector in the UK, with the expansion of internet gaming and the abolition of betting tax in October last year.

Rival chain William Hill floated on the London market last month, and despite the turbulent trading conditions its shares are still 7% higher than their flotation price.

Coral said its sale would help it seek out new growth opportunities.

"This deal provides an ideal platform from which we can exploit the anticipated growth in betting and gaming both in the UK and internationally," said managing director Vaughn Ashdown.

Mr Ashdown is take over as chief executive from present incumbent Bob Scott when the sale goes through.