Peel is poised for Thistle flotation
By Dominic Walsh
Robert Peel, long recognised as one of the industry's leading hotel operators, is set for a triumphant return to the stock market this October via a £1b-plus flotation of Thistle Hotels (formerly Mount Charlotte Investments).
Mr Peel confirmed last week that City firms Baring Brothers and Merrill Lynch had been appointed as advisers "in connection with the possible flotation of Thistle Hotels later this year".
He declined to be drawn further, but Caterer understands the timetable envisages publication of a prospectus in September, with the flotation the following month. A roadshow to attract potential shareholders will precede the float.
City sources expect the company to be valued at between £1b and £1.5b, depending on the way the issue is structured and whether the company's bank of undeveloped hotel sites is included.
One highly placed source said the possibility of a trade sale in the pursuit of a higher price should not be ruled out at this stage of the process.
Thistle, the UK's second largest hotel company and London's biggest with 24 hotels, is 70% owned by New Zealand-based Brierley Investments, with the balance of the company held by the Government of Singapore Investment Corporation and Temasek Holdings.
Brierley acquired Mount Charlotte in 1990 for £664m after Mr Peel's acquisition of Thistle the year before (for £645m) left the company exposed to the recession.
However, the New Zealand group had never intended to be a long-term owner and the economic recovery - accompanied by a jump in asset values - was all it needed to seek an exit for its investment.
Its ownership has, nevertheless, been characterised by significant investment - some £162m in the past five years - enabling Mr Peel to continue his extraordinary record of achieving some of the industry's highest margins.
The gradual "Thistleisation" of the group is progressing apace, and by the end of 1997 some 70 of its 100 hotels will be operating under the Thistle flag.
It is thought unlikely that Brierley will retain a majority stake in the company.
Assuming Brierley opts for a flotation rather than a trade sale, Thistle will become the fifth major hotel player to hit the stock market this year. Macdonald Hotels, Cliveden, Millennium & Copthorne Hotels and Jarvis Hotels have all made their debuts during 1996.
