Blackstone in new bid for hotel group De Vere
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Blackstone in new bid for hotel group De Vere
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Category: Worldwide
This is a press release selected by our editorial committee and published online for free on 2006-03-27
The American private-equity firm Blackstone has made an 800p-a-share bid approach to De Vere, which runs 35 hotels such as the Belfry, the Ryder Cup venue, valuing the company at pounds 670m
This is Blackstone's second attempt to take control of the hotel group, which rebuffed a 750p-a-share approach in December.
A bidding war looms as other private-equity groups such as Permira and Star-wood Capital have also set their sights on the hotel group. The shares jumped 10 per cent to a record high of 825p yesterday.
De Vere, which owns a range of four-star and five-star hotels, including the Cavendish in London's May-fair and Brighton's Grand, could be worth up to 85 0p a share, said analysts, given the increasing interest in hotel property.
Private-equity firms have circled De Vere for months. Blackstone has been very active in the hotel and property sector and bought Wyndham Hotels & Resorts last year. Permira is also known to have a strong interest as it could combine its Travelodge budget-hotel chain with De Vere's Village brand. Starwood Capital, which owns the French hotels group Societe du Louvre, is also known to be interested. Another mooted suitor is Spain's NH Hoteles.
Jeffrey Harwood, at Oriel Securities, said: "This is an attractive company with a lot of assets and we could see an auction developing."
Apart from its trophy hotels, De Vere runs 16 Village-branded hotel developments in the mid-market range, Greens health clubs and G& J Greenall, which makes white spirits, vodka and gin. A property re-evaluation in November, which put the net asset value at 786p per share, highlighted the group's worth for any would-be bidder. Analysts said any buyer might want to accelerate the roll-out of the successful Village brand, which comprises a three-star hotel, pub, restaurant and health club. The Greens and Greenall businesses could be sold off.
De Vere recently sold its flagship asset the Belfry, near Birmingham, but retained the contract to manage the hotel in a lucrative pounds 186m deal.
De Vere is run by three former Whitbread men: the chief executive Carl Leaver' David Richardson, who is to succeed Lord Daresbury as chairman when he steps down in April' and the finance
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