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Macdonald Hotels denies vacant sales

24 August 2006

Macdonald Hotels is playing down reports that it is considering selling some of its hotels on a "vacant possession" basis. Macdonald instead insisted that it still plans to sell 23 properties that it will lease back or continue to manage.

The company dismissed a report in Estates Gazette claiming that it was offering the hotels with vacant possession to make them more attractive to investors.

Finance director Gordon Fraser confirmed that the group had offered selected financial information to a selected group of investors. "In the past few months, we have been approached by a significant number of investors interested in acquiring our hotels," he said.

In a statement released earlier this week, the company said: "We embarked on this exercise to complete a sale-and-leaseback or sale-and-manageback deal, and these were the only two bases on which bids were invited.

"However, not unexpectedly, we have received a number of bids on a vacant possession basis, and not all necessarily for hotels that were in the information memorandum."

The company appointed Deloitte earlier this year to oversee the deal and plans to complete the transaction, estimated to be worth £200m, by early autumn. The Scotland-based hotel group will use the cash to pay off debt and develop more five-star city-centre hotels.

Macdonald has recently developed five-star properties in Cardiff and Sheffield and has properties under construction in Manchester and Bristol.

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