Principal has 21 hotels, mostly in the three- and four-star sector. Sixteen are in England, mostly in the Midlands and the North, with others in Edinburgh, Dublin, Copenhagen and Amsterdam. Its largest hotel is the Norbreck Castle in Blackpool which has 361 bedrooms.
Principal chairman John Lewis led a management buy-in of the group in 1994. Since then, pounds 11m has been spent on improving the sites, including the addition of more than 200 bedrooms. Principal will use the proceeds to reduce debt and fund the further development of the portfolio.
In the year to October 1995, Principal recorded operating profits of pounds 8.1m on sales of pounds 42.6m. It is expected that profits should be significantly ahead in the year to October 1996.
Mr Lewis said: "Since the buy-in we have developed a unique portfolio of classic period hotels. We have also established systems and a culture through which our employees identify with the financial success of the group."
Principal is the latest in a string of hotel companies to come to the market this year. Others have included Macdonald, Millennium & Copthorne and Jarvis. Thistle Hotels is coming to the market soon while Lonrho has decided to postpone the float of its Princess Metropole chain and is looking at offers from trade buyers instead.
Deutsche Morgan Grenfell is sponsoring Principal's flotation, which will be by way of a placing.