Granada launches hotel sales

Granada, the leisure and media conglomerate, yesterday launched the long-awaited disposal of its Exclusive Hotels, with the sale of the Hyde Park Hotel in London for pounds 86m to Mandarin Oriental International, a unit of Hong Kong-based Jardine Matheson.

The sale, on the eve of its full-year results announcement today, marks the first step toward selling all 17 Exclusives, inherited by Granada when it won its pounds 3.9bn takeover of Forte early this year. The rest of the portfolio, which will be sold singly or in small units, is expected to generate pounds 900m, which will be used to pay down Granada's pounds 3.5bn debt.

But company insiders cautioned against expectations that the disposal programme would be accelerated. "We are looking to get the best prices we can, and will not be rushed," said one senior executive. The sale is expected to be completed by early next year, and will see such landmarks as the Westbury and the Grosvenor House change hands, probably to a range of Far Eastern, European and US buyers.

The relatively leisurely pace of disposals was due, analysts said, to Granada's desire to get the highest prices it can at a time when several high-profile hotels and chains have been placed on the market. Moreover, the stock market has been unbothered by the company's high debt load, against a backdrop of low-interest rates, and has given Gerry Robinson, the chairman, plenty of leeway in tackling the disposals programme.

The Hyde Park, which will be renamed the Mandarin Oriental Hyde Park, boasts 185 rooms and had an operating profit in the year ending 31 January of pounds 4.7m. Mandarin said yesterday that the acquisition would be earnings- enhancing by the end of next year.

The hotel disposal programme is expected to be followed by the acquisition of Yorkshire-Tyne Tees.