Hanover to buy conference centres

Six-strong hotel group Hanover International is planning to buy three conference centres for £17m.

The company said today it had entered into a conditional agreement to buy the training and conference centres from owner Birchin International.

The centres being acquired are Eynsham Hall, Oxford; Chewton Place, Bristol; and Swinton Castle, Harrogate. Between them, they have 215 bedrooms and 69 meeting rooms.

Hanover plans to fund the purchase through a £14.4m bank loan and by issuing new shares.

Because of its size, the acquisition will need to be approved by shareholders at an emergency general meeting to be held on or around 14 March.

Peter Eyles, Hanover's executive chairman, said: "The acquisition provides Hanover with a tremendous opportunity to strengthen its position as an operator of high-quality conference and training facilites.

"I believe that the new venues should be enhanced by their adoption of the Hanover brand and will provide our existing and new clients with a considerable range of facilities throughout the country."

"We anticipate that the acquisition will be earnings-enhancing in the year to 31 December 2001."

Hanover believes there is strong growth potential in the conference and training market, which is not as seasonally affected as the hotel sector and therefore provides relatively stable year-round occupancy rates.

It also sees scope for cross-referrals from Birchin's and Hanover's existing customers.

For the year to 31 December 1999, about 86% of Hanover's sales came from corporate accounts and nearly half of these customers used the group's existing conference and training facilities.

Hanover operates six four-star hotels with a total of 739 bedrooms. They are located in Reading, Daventry, Hinckley, Ashbourne, Huddersfield and Skipton.