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Lone Star shoots for €300m profit on popular hotel group


Jurys Inn

Jurys Inn

Jurys Inn

US vulture fund Lone Star is set to flip the Jurys Inn chain, likely making at least a €300m profit on the business where taxpayer-owned IBRC and other banks wrote off €300m in loans in 2013.

And the Irish Independent understands that Dalata, Ireland's biggest hotel group, is unlikely to be among the bidders for the assets. Market sources said the Jurys Inn chain probably does not represent good value for the group, despite Dalata's stated aim of expanding its presence in large regional UK cities, where Jurys Inn has a sizeable footprint.

The Jurys Inn chain, which is part of the Amaris hotel group that's owed by Lone Star, is likely to attract bids of up to €1.5bn.

Amaris also includes other hotel brands under the Hilton and other names, but the 39 Jurys Inn hotels are being sold first.

It's thought that the remainder of the Amaris portfolio will be sold subsequently.

There are two Jurys Inn properties in Dublin, and one each in Cork, Galway and Belfast. All the other properties bar one, which is in Prague, are in Britain. The properties are understood to be split almost evenly between freehold and leasehold premises.

Lone Star acquired the Jurys Inn chain in 2015 for about €930m.

The private-equity group bought the business from a group of investors that included the Oman Investment Fund, Mount Kellett Capital Management, Ulster Bank, Avestus Capital Partners and Westmont Hospitality, one of North America's largest privately-owned specialist hotel investors.

In April 2013, Jurys Inn secured about €140m in new investment from the syndicate in a rescue deal.

That deal, combined with a debt write-off of about €330m, dramatically improved the outlook for the business, which had been saddled with enormous liabilities.

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Jurys Inn had been acquired in 2007 by a consortium of investors fronted by Derek Quinlan's private equity firm, for almost €1.2bn in cash.

Other bidders had included Whitbread and Lydian Capital, a Swiss vehicle backed by horse-racing magnates John Magnier and JP McManus, as well as Kerry Group founder Denis Brosnan.

Lenders for the Quinlan Private acquisition included Royal Bank of Scotland, through Ulster Bank, Anglo Irish Bank (subsequently Irish Bank Resolution Corporation) and Allied Irish Banks.

They wrote off €330m in debts in 2013 as part of the deal to seal new investment for the Jurys Inn chain.

The latest planned sale of the Jurys Inn chain comes as a hard Brexit looks increasingly likely. But the Jurys Inn portfolio has a regional focus, with much of its business generated from domestic UK travellers and businesspeople.

Stockmarket-listed Dalata, which operates under the Maldron and Clayton brands and also manages other hotel properties, has previously indicated that it is interested in expanding its presence in regional UK cities. Dalata is headed by former Jurys Doyle CEO Pat McCann, who left that business in 2006. Dalata owns 24 hotels in Ireland and the UK, including in London, Leeds and Manchester.

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