Jarvis share price jumps on rumour of Petchey bid

The future of Jarvis Hotels continues to attract speculation amid rumours that hotel entrepreneur Jack Petchey is preparing to bid for the company through his offshore investment firm Trefick.

Petchey, who holds a 25.7% stake in Queens Moat Houses and already owns a 29% stake in Jarvis, could merge the company with his recently acquired Hanover International chain, if he bought it.

Investment and advisory firm Dawnay Day has also been linked to a bid for the midmarket operator, having bought 1.2 million Jarvis shares earlier this month, taking its stake in the company to over 4%.

Jarvis's share price was buoyed by the speculation, hitting 152p at one point - a four-year high - valuing the firm at about £155m.

Although Jarvis refused to comment on the speculation, a source close to the company dismissed it as an attempt to explain the rise in share price. He added that Jarvis hadn't released any statements to the Stock Exchange and Petchey hadn't revealed his plans to the company.

However, Martin Armistead, director of hotels at property consultants Colliers RH, said a "flurry" of takeover bids is "inevitable" as the company is so undervalued at present.

"A lot of people will take a look at Jarvis. It's an obvious target," said Armistead. "I'm not sure that bargain is the right word - opportunity is probably a better choice."

Jarvis, which has 67 hotels and owns the rights to the Ramada brand in the UK, made profits of £17m on turnover of £162.4m for the year to March.