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The Independent Online
Thistle Hotels said it may face a takeover, a move that would cost at least pounds 1.23bn and give a buyer of Britain's third-largest hotel company a stake in the nation's hotel boom.

Three companies, including a UK hotel company and a US real estate investment trust, are interested in Thistle and an offer could be made within five weeks.

"There's a huge wall of US money looking at the UK hotel market," said Iain Wilkie, a partner in Ernst & Young's hospitality and leisure division, and "what we are seeing in the UK is consolidation."

However, two possible bidders, Millennium & Copthorne Hotels and US company Starwood Hotels, have ruled themselves out of the bidding.

Leeds-based Thistle, which is 46 per cent owned by Brierley Investments of New Zealand, owns 91 hotels in the UK, including London's Tower and Mount Royal properties. Takeover interest comes as Brierley weighs asset sales and as UK hotel companies such as Jarvis Hotels and Stakis race for sites amid rising room rates.

Thistle shares rose 27 per cent, to 245 pence, after the company said it was "reviewing" the approaches.

Rising earnings and the prospect of takeovers are propelling hotel shares higher. The leisure section of the FT-SE 350 has risen 28 per cent in the last six months, compared with an 18 per cent increase in the full index. Thistle shares are up 51 per cent in that period.

Last week's announcement comes a week after a rival hotel company, Vaux Group, said it had received a bid approach, possibly from Stakis.

Thistle's portfolio includes about 60 four-star hotels, which charge more than lower-grade tourist properties. Also, more than half Thistle's 12,993 hotel rooms are in London, which is benefiting disproportionately from buoyant consumer spending. Thistle reported 1997 profits of pounds 76.3m.

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