Thistle shares slump 26% as bid talks fail
Wednesday 19 August 1998
A wave of selling left the stock 48p lower at 168p, the worst performer in the FTSE 250 index. City analysts predicted that Thistle's main shareholder, the New Zealand investment giant, Brierley Investments, would have problems in finding another buyer for its 91 hotels.
"It is clearly disappointing news for Thistle and more so for Brierley which has committed itself to getting rid of these assets," one analyst said.
The owner of landmark London hotels such as the Tower Thistle and the Grosvenor said late on Monday that it had terminated discussions with a mystery bidder - believed to be Nomura - because the offer was "unacceptable".
The Japanese bank is understood to have reduced its initial offer of up to pounds 1.5bn by around 10 per cent because of recent volatility in financial markets. Nomura declined to comment yesterday.
The collapse of talks is a huge blow for Brierley's plans to sell its 46 per cent stake in the business as part of an overhaul of its European holdings. Sources close to Brierley said that the company would keep its stake in Leeds-based Thistle for the time being and was not prepared to sell at any price offered.
They added that Brierley was now working with Thistle's management on a plan to return up to pounds 250m to shareholders via a share buyback or exceptional dividend.
Sources close to Thistle said that its plans to sell 30 regional hotels were on course, with two bidders still in the running, and added that it would look to sell individual hotels in the near future.
The company wants to dispose of most of its three-star hotels in order to focus on the higher-margin four-star properties.
However, City analysts said that Thistle's attempts to sell its assets would be hampered by increasing competition in the pounds 8.8bn UK hotel industry.
"Stakis and Millennium & Copthorne have indicated they would be willing buyers of London hotels, but in all honesty [pub and hotel group] Vaux's Swallow hotels are a much better product," one City observer said. "Thistle is going to have to try hard to sell them for a decent price."
- 1 BBC election debate: The one photo that summed up the whole 90-minute leaders debate
- 2 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 3 18th century sex toy found in 'toilet of sword fighting school' in Poland
- 4 'I wish my teacher knew...': Young students share their 'heartbreaking' worries in notes
General Election 2015: David Cameron catching up in polls – but he badly needs a clear lead
The Hubble Space Telescope's amazing journey 25 years on
South Africa xenophobic attacks: Shops looted and violence on streets of Johannesburg as foreigners are forced to hide in police stations
Earthworms rain down from skies over Norway, puzzling scientists
18th century sex toy found in 'toilet of sword fighting school' in Poland
The only black face in the Ukip manifesto is on the page about overseas aid
Ukip is the only main political party to not address LGBT rights in its manifesto
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
Russian warships in English Channel 'to conduct anti-aircraft and anti-submarine military drills'
iJobs Money & Business
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...
£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...
£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...