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Thistle Hotels set to announce pounds 1.5bn stock market float

Nigel Cope
Sunday 18 August 1996 18:02 EDT
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Thistle Hotels is expected to announce plans for a stock market flotation this week that will value the 100-strong hotel chain at pounds 1bn- pounds 1.5bn, writes Nigel Cope.

Thistle's decision to go public is the latest in a string of announcements in the hotel sector, which has enjoyed a significant recovery this year, with London hotels performing particularly strongly. Millennium & Copthorne, MacDonald and Jarvis Hotels have already floated this year and last week Lonrho announced plans to float its hotels division, Princess Metropole, for pounds 600m-pounds 700m.

Thistle's chief executive, Robert Peel, will announce a strong set of half-year figures tomorrow, which are forecast to show that operating profits are 20 per cent up on turnover 12 per cent higher. Last year the company recorded profits of pounds 35m on sales of pounds 267m

Thistle, which was formerly known as Mount Charlotte Hotels, has a strong presence in the booming London market with hotels such as the Kensington Palace, the Mount Royal in Marble Arch and the Tower, an 800-bedroom hotel in the City. Most of its hotels are three or four-star.

A stock market flotation would set the seal on an impressive performance by Mr Peel, who joined the company 20 years ago when it included only a handful of seafront hotels and some nightclubs. He acquired the company from brewer Scottish & Newcastle in 1989. The following year it was acquired by New Zealand-based Brierley Investments, which remains the parent company. Based in Leeds, Thistle now has a string of hotels across the country operating under the Thistle and Mount Charlotte names.

Thistle is not expected to reach the stock market until October but will have to cope with a market that has provided a stern test for recent new issues. Millennium & Copthorne and MacDonald hotels enjoyed good debuts but Jarvis Hotels proved a disappointment and its shares are still trading 10p below its 175p issue price.

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