Jurys Hotel group is seeking an indemnity against any outstanding taxes due by the Doyle Hotel group shareholders, as part of the buy-out deal currently being negotiated.

Jurys is understood to be particularly concerned about possible Capital Acquisitions Tax liabilities linked to the Doyle stock which might complicate the £150 million to £200 million buyout.

A spokeswoman for the Doyle group, asked about the issue, said "negotiations are proceeding satisfactorily and a statement will be made in due course". She would not comment further. The signing of a share purchase agreement between the two parties is not expected until the new year.

The consideration being proposed for the deal is just under £94 million in cash, the after-tax return on the sale of a number of investment properties owned by the Doyle group, and a 25 per cent share in the new Jurys Doyle Hotel group. The shareholding is to be divided among four members of the Doyle family with a fifth, former managing director Mr David Doyle, receiving only cash.

Jurys has identified a number of issues which it believes need to be addressed before it can put the deal to its shareholders. Among the issues identified are structural problems at the Berkeley Court, Burlington and Montrose hotels and a series of licensing irregularities associated with six of the Doyle hotels.

The licensing irregularities relate to extensions which have been built and which are not covered by the existing liquor licences for the Burlington, Berkeley Court, Westbury, Montrose, Tara Towers and Skylon hotels.

New licences for these hotels will have to be sought by Jurys upon completion of the proposed buyout. Jurys feels there is little chance that the courts would refuse to grant new licences and that it would be left with "alcohol-free" hotels, though the possibility exists. The cost of dealing with the issue is likely to be about £15,000 per licence.

The group is also anxious that the intoxicating liquor licences for the Doyle hotels be transferred out of the name of Mr David Doyle prior to the deal, or that Mr Doyle give an undertaking that he will do so.

Mr David Doyle, the former managing director of the Doyle group, will be taking only cash and will not receive stock, if the deal goes ahead. Four members of the Doyle family will each receive 6.25 per cent of the shares in the new Jurys Doyle Hotel group. These are: Mrs Margaret Doyle, wife of the late Mr P V Doyle; Mrs Bernadette Gallagher; Mrs Eileen Monahan; and Mrs Anne Roche.

Mr Michael Doyle is understood to have been paid £24 million by the other members of the family for his shares in the Doyle group.

Doyle hotels was established in 1961 by the late Mr P V Doyle. He died in 1988 and left the hotel group to his wife, three daughters and two sons. Mr David Doyle became managing director upon the death of his father. He resigned in June 1994, was reappointed in February 1996, and resigned again in April 1997.

In September, Jurys announced that it was in discussions with the Doyle Hotel Group to amalgamate, creating a chain of 28 hotels and inns. The enlarged group would be known as the Jurys Doyle Hotel Group, Jurys stated. The enlarged group will be valued at about £400 million. Jurys has a market capitalisation of £220 million.