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QMH receives approach

22 June 2004
QMH receives approach

The race to buy troubled hotel group Queens Moat Houses has taken another twist, with the company announcing it has received an approach from finance group Whitehall Funds.

In a terse statement to the London Stock Exchange, the chain said it had received the approach from the property financier, owned by Goldman Sachs, "which may or may not lead to an offer" being made for the company.

But it added it was continuing to pursue a number of options as part of its strategic review and "a further announcement will be made when appropriate".

Debt-laden QMH was put up for sale in January, two months after the group appointed investment bank Morgan Stanley to conduct a review of the business.

Possible buyers in the frame have included Maurice Gourgey's Pedersen Group and a consortium of US investor Colony Capital and Accor.

Speculation that Goldman Sachs was about to enter the fray grew last month when it merged that the investment bank and US hotel company Westmont Hospitality Group had bought a 19% stake in QMH, taking its holding to 29.6%.

QMH's £640m debt dates back to its near-collapse more than 10 years ago, which resulted in a massive write-down of its assets and the ousting of its board.

Since then the chain has been selling off hotels in a bid to reduce its debt mountain, but was pushed further into the red following the outbreak of foot-and-mouth disease, the 11 September terror attacks and the general economic slow-down.

by Nic Paton

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