LONDON: Lone Star, the Dallas-based private equity group, will bring together 89 UK hotels to form a £1bn company, Amaris, which it hopes to be able to float on the stock market in the medium term.
Lone Star has targeted distressed hotels in recent years, purchasing 29 Jurys Inn hotels in January for £680m and Puma Hotels, which owned the Lygon Arms in the Cotswolds and the Imperial in Torquay, for £323m last year. Puma has now been rebranded as the Hotel Collection.
The new umbrella company, whose name means “child of the moon”, will also include Lone Star’s 21 Mercure hotels, three Hilton properties and, when a deal completes on 30 July, 19 Thistle hotels.
It will be one of the largest hotel owners in the UK, with 8,000 employees.
The move comes as the attractiveness of the hotel sector has passed 2007 levels, when measured by revenue per room, and as other owners begin to leave the sector. The low-cost chain Travelodge is courting buyers while KSL Capital recently sold the Malmaison Hotel du Vin brands. In the US, the private equity group Blackstone sold 90m Hilton shares in May, cutting its stake to less than 50 per cent of the business, and Starwood has put itself up for sale.
“The strategy is to create a branded hotels business. Many of these hotels have great locations but have not had much put into them. We have £100m to invest and renovate these hotels,” said John Brennan, the current head of Jurys Inn who will become Amaris’ chief executive.
Lone Star decided to bring together its hotels portfolio to create a simplified and more attractive business. “We want to make it simple and easy to understand,” said Mr Brennan.
