A total of 24 former Jarvis hotels will be rebranded Mercure under a franchise deal with Accor after Jarvis Hotels was put into a pre-pack administration and Royal Bank of Scotland took control of the properties.
The move, which is expected to safeguard 1,900 jobs, will see ownership of the sites transfer to a new company, Jupiter Hotels.
Jupiter is a 50:50 joint venture between insitutional investor Patron Capital and West Register, part of the Global Restructuring Group of RBS.
Andrew Gill, formerly of Intercontinental Hotels Group (IHG), will become interim chief executive of Jupiter Hotels.
Apart from the main Jarvis board, all of the existing employees of Jarvis's head office and the 24 hotels will transfer to Jupiter.
Josh Wyatt, director of hospitality and leisure at Patron Capital, said: "This is a perfect example of the type of transaction we are actively seeking in this sector. Our specialist team has extensive experience in the leisure and hotels sector and we are confident that this experience coupled with significant planned capital expenditure will enable us to create a highly regarded, successful hotel business."
Jean-Jacques Dessors, chief operating officer of Accor UK and Ireland, said: "This major franchise agreement is a significant milestone for Accor in the realisation of our ambitious growth targets. This expansion further demonstrates our commitment to building the Mercure hotel brand in the UK, which is such an important market for Accor. We will continue to pursue further franchise growth opportunities this year and beyond."
The joint venture investors are injecting £40m, with debt financing of £71m provided by RBS, HSBC and Bank of Ireland, which were the original lenders to Jarvis.
By Neil Gerrard
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