Sent: Tuesday, March 12, 2002 8:24
PM
Subject: [sharechat] BRY suspension
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Thistle Hotels PLC
12 March 2002
March
12,
2002
THISTLE HOTELS
PLC
('THISTLE' OR THE
'COMPANY')
Proposed Disposal of 31 Regional
and
6 London Hotel Businesses (the 'hotel
businesses')
for £600 million
Transaction Highlights
Thistle announces that
it has today reached agreement with Gamma Four Limited
(the 'Acquirer'), a
wholly-owned subsidiary of Euro & UK Property Limited (a
private
venture capital company and the ultimate parent of the Orb
group),
regarding the terms of the proposed disposal of a group of
subsidiary companies
of Thistle which together own 37 Regional and London
hotel businesses
(the 'Disposal').
The principal features of the
transaction are:
- Total payment to Thistle of £600.4 million,
comprising £1 to be paid in cash
on completion by the Acquirer to Thistle
for the shares in three companies (the
'Sale Companies') that own the
hotels and carry on the Hotel Businesses, the
repayment on completion by
certain of the Sale Companies and certain
subsidiaries of the Sale
Companies of approximately £555.4 million in settlement
of outstanding
inter-company indebtedness due to Thistle and £45 million payable
no later
than 1 January 2005 pursuant to a loan note issued to Thistle by one of
the
companies to be sold to the Acquirer.
- Upon completion of the
Disposal, Thistle Hotels (Management) Limited, a
wholly-owned subsidiary of
Thistle, will enter into agreements under which it
will undertake the
ongoing management of each of the hotels for a period of 30
years from
completion of the Disposal.
- A relationship agreement will be entered
into between Thistle and the Orb
group which will contain, among other
provisions, a guarantee by Thistle in
relation to the level of earnings
before interest, tax, depreciation and
amortisation ('EBITDA') derived from
the Hotel Businesses.
- The cash proceeds of the Disposal will amount
to approximately £555.4 million,
before transaction costs, a working
capital adjustment and the repayment to
Thistle of the loan note. No
significant tax liability is expected to arise for
Thistle on the Disposal
of the Hotel Businesses. £174.0 million of the net cash
proceeds will be
applied in the first instance to repay Thistle's bank loans and
the balance
of the proceeds will increase the Company's cash position by
approximately
£381.2 million (before transaction costs), thereby providing
Thistle with
greater resources to pursue potential strategic acquisition
opportunities
for further growth and development.
- The 37 Hotel Businesses being
disposed of comprise Thistle's Regional hotels,
excluding Thistle Heathrow
and Thistle Edinburgh, and six London hotels.
- For the year ended 30
December 2001, the Hotel Businesses had turnover of
£140.8 million and
operating profit of £42.1 million, after charging
depreciation and
amortisation of £13.4 million (giving EBITDA of £55.5 million).
- Due
to its size, completion of the Disposal requires the approval of
Thistle's
shareholders. Irrevocable undertakings to approve the Disposal
have been given
by shareholders representing approximately 59 per cent. of
the issued ordinary
share capital of Thistle.
A circular will be
posted to shareholders shortly setting out details of the
Disposal and
convening an Extraordinary General Meeting to approve the Disposal.
The
Disposal is expected to be completed following its approval at
the
Extraordinary General Meeting.
Commenting on the Disposal, David
Newbigging, Chairman of Thistle, said:
'This disposal represents a
further significant step in the re-positioning of
the Company and both
improves and rebalances Thistle's hotel portfolio. By
concentrating on
delivering growth through our core hotel management business,
with a
reduced emphasis on the capital intensive ownership of hotel properties,
we
expect to benefit from increased operating flexibility. This
transaction
significantly strengthens our balance sheet and leaves us well
placed to pursue
potential strategic acquisition opportunities for further
growth and
development, with the objective of delivering value to our
shareholders and
improving the return on shareholders' equity.'
Ian
Burke, Thistle's Chief Executive Officer, added:
'The Board believes
there will be opportunities for the continuing Thistle group
to develop its
hotel business. Over the course of the current financial year the
Board's
focus will continue to be on managing the business efficiently,
improving
operational cash flow generation and seeking opportunities to improve
the
return on shareholders' equity.'
The Chairman of Orb Estates Plc,
Samuel Nolan, commented:
'We are particularly pleased to have become
involved with Thistle Hotels and to
have been part of such an innovative
restructuring process.'
D.
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