Thistle in £600m sell-off deal
Thistle Hotels has struck a £600m deal to sell 37 hotels across the UK to a venture capital firm while retaining the management contracts for 30 years.
It has sold all its regional hotels, except the Thistle Heathrow and the Thistle Edinburgh, plus six London hotels to the Orb group, a subsidiary of Euro & UK Property.
The six London hotels are: Thistle Lancaster Gate, Thistle Bloomsbury, Hendon Hall, Cannizaro House, Thistle Kensington Park and Thistle Kensington Palace.
On completion of the sale, Thistle will enter into agreements under which it will take on the management of the hotels for 30 years. Thistle will guarantee a certain level of earnings from the hotel businesses. General managers of the hotels will continue to be employed by Thistle, but the remaining employees will become employees of the Orb group on completion of the sell-off.
Thistle will use £174m of the cash proceeds to repay bank loans, leaving it with about £381.2m which it could use "to pursue potential strategic acquisition opportunities for further growth and development".
For the year ending 30 December 2001, the hotel businesses turned over £140.8m and made an operating profit of £42.1m.
Because of its size, the disposal will need to be approved by Thistle's shareholders.
