MANCHESTER - Singapore-listed BIL has approved the sale of its 46 per cent stake in British hotel chain Thistle Hotels.
The Business Times said the stake will fetch about £750 million ($2.56 billion). BIL chief executive Ian Burke is also lining up a management buyout at around £720 million.
The sale
talk was prompted by upheaval within BIL.
The speculation has its origins in last month's admission by Quek Leng Chan, the Singapore-based billionaire, that an unnamed third party wanted to buy his controlling 22 per cent stake.
Thistle Hotels has been a millstone for BIL since it was bought during the Gulf War in 1991. The company put in a bid that was thought to be on the low side but when the war broke out, share prices plunged, particularly in the tourism sector and BIL was left holding the £1 billion baby.
The debt it took on to cope nearly sank the company and it has been in virtual permanent restructuring mode ever since.
Rival hotel group Millennium & Copthorne, whose chairman and controlling shareholder is Kwek Leng Beng, cousin of Mr Quek, is also said to have approached Thistle. US group Cendant, French operator Accor and Six Continents were also in the frame.
This year, Thistle pulled off a £600 million sale and leaseback deal with London-based property group Orb Estates after coming under increasing pressure from shareholders for improved returns.
Shareholders have hoped for a share buyback or special dividend since the Orb deal but nothing has come up.
Mr Burke said he would use at least some of the funds to pay Thistle's £170 million debt.
Thistle was hit hard by the September 11 terrorist action with sales falling 25 per cent. Its share price hit a low of 78p. They are still half of their 1998 peak of £2.70. The price rallied 5 per cent to £1.30 on Friday.
- NZPA
