Collins Stewart joins Premier Lodge bid battle

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The Independent Online

Collins Stewart, the broker, has joined the £500m-plus bid battle for the budget hotels chain Premier Lodge.

As with its other recent planned acquisitions, Collins Stewart would buy the hotel business and then float it immediately on the stock market in a process known as an accelerated IPO. The broker recently used this technique to out-bid trade buyers and private equity houses vying for Centaur, the business-to-business magazine publisher. Before that, an accelerated IPO was used successfully by Collins Stewart to float Northumbria Water, the utility, for £2.2bn, and Center Parcs, the resorts group, for £285m. Industry sources suggested the strategy could put Collins Stewart in pole position for the Premier Lodge deal.

A Collins Stewart spokesman confirmed that it had submitted a bid. He added: "We believe we have put in a competitive offer."

Premier Lodge is being auctioned off by the investment banks Merrill Lynch and Bear Stearns on behalf of the chain's owner, the pubs group Spirit.

The 132-strong chain of budget hotels had already attracted bidders, with offers of £500m to £600m. Other contenders include the entrepreneur Hugh Osmond; Whitbread, the hotel and restaurant group; and Apax, the private equity house.