The Jurys acquisition of Doyle Hotels has been finally agreed and will be announced formally this morning. The purchase price is understood to be in the region of £230 million to £240 million (€290 million-€300 million) somewhat ahead of the £200 million figure which had been mooted. Negotiations on the deal have been underway since last September, when the two groups first announced that they were in discussions. The agreement was finally signed yesterday.
A number of factors delayed the negotiations and it only became clear in the past week or so that an agreement would definitely be concluded. In the end the Doyle family appear to have driven a hard bargain with Jurys. It is believed that the family is to end up with around 26 per cent of the equity of the enlarged group under the terms of the agreement. They will also receive a substantial cash payment. When debt on the Doyles balance sheet being assumed by Jurys is counted in, the total consideration will be in the £230 million to £240 million region.
The new group will comprise of 28 hotels and inns in the Irish UK and US markets and will be known as the Jurys Doyle Hotel Group. It will be of similar size to the major British chains and will be by far the biggest player in the Irish market, leaving its nearest competitions - Ryan Hotels and the Great Southern chain - some way behind. In purchasing the Doyle group, Jurys is buying 11 hotels, including high profile Dublin names such as the Berkeley Court, the Burlington, the Westbury and the Skylon. Doyles also has a hotel in London and three hotels in Washington DC. Mr David Doyle, a former managing director of the Doyle Hotels and son of founder Mr P.V. Doyle, is to receive only cash from the deal. Another son, Mr Michael Doyle, is understood to have been paid £24 million for his shares in the group in 1995. The members of the family who will hold shares in the new group and join its board are Mrs Margart Doyle, the widow of the founder and her two daughters, Mrs Bernadette Gallagher and Mrs Eileen Monahan.
The precise detail of the agreement will be announced to the Stock Exchange this morning. However the combined group is likely to have a market value in the region of £475 million, valuing the shares which the Doyle family will hold in at around £120 million. In addition they will receive a substantial cash payment - earlier in the negotiations the cash sum being spoken about was £94 million - and Jurys is to assume some Doyle Hotel debt onto its balance sheet.
In its most recent results, Jurys Hotel Group reported a strong half-year performance for the six months to October 1998, with pre-tax profits up 24 per cent to £13.3 million (€16.89 million)
The Doyles/Jurys deal is in line with the international trend towards consolidation in the hotel sector and is bound to create speculation of further rationalisation in Ireland. The Great Southern group is likely to come up for sale shortly, provided that the Government agrees to a request from its parent, Aer Rianta, who wishes to sell.
