Bass in talks to buy Oz hotels group
Wednesday 22 December 1999
Bass, which runs the Holiday Inn, Crowne Plaza and Inter Continental hotel chains, appears to have pipped France's Accor in the race to buy SPHC's 61 hotels ahead of next September's Sydney 2000 Olympics.
A spokesman for Bass would not comment on the speculation, which comes amid growing talk that the group is pulling out of brewing to focus on its profitable hotels division.
It is believed, however, that the UK company has agreed to buy the SPHC assets, which comprise 28 hotels in Australia and 38 elsewhere in the Asia Pacific region, for about A$315m (pounds 125.9m). The deal is expected to close next month. Accor has admitted bidding A$250m for the hotels, which include the Parkroyal, Centra and Travelodge brands.
Bass has entered exclusive due diligence on the deal and is expected to convert the Australian properties to its Holiday Inn, Crowne Plaza and Inter-Continental brands once the acquisition is complete. About 45 of SPHC's hotels are branded under its Centra and Parkroyal banners and managed under contracts for third-party owners. Eight are owned/leased and managed, while a further eight are in franchise agreements.
Bass currently operates about 100 hotels in the Asia Pacific region, including six in Australia, largely as a result of the group's pounds 1.8bn acquisition of Inter-Continental in March 1998.
Bass has consistently refused to confirm speculation that it is planning to withdraw from the beleaguered brewing sector. But a spokesman said yesterday: "We are not emotionally attached to any of our divisions." At the company's annual results presentation earlier this month Sir Ian Prosser, Bass's chairman, unveiled the group's 2000 investment plans, which were heavily skewed towards the hotels division. Of the total pounds 800m capital expenditure allocation, the hotels unit accounts for pounds 400m. The leisure retail division will receive pounds 300m, with just pounds 100m left for branded drinks.
Bass's total pre-tax profit for the financial year ended 30 September was up 4.8 per cent at pounds 682m on turnover of pounds 4.7m. Operating profit for the hotels division was up 23.5 per cent at pounds 321m while Bass Brewers operating profit rose just 6.7 per cent to pounds 160m.
Bass shares yesterday closed 7.5p lower at 760p.
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