Precinct Investments made an improved takeover proposal to Jurys Doyle Hotel Group last night despite an agreement by the Irish hotel group to sell a prime site to another developer if shareholders approve.
Precinct said in a statement that its fourth proposal to buy Jurys was worth €17.50 per share, up from a previous approach at €16.50, assuming 80 per cent of shares are tendered.
Jurys shares had closed earlier at €5.6, down 0.95 per cent after gaining 25 per cent since Precinct first approached the company with a takeover proposal on May 6th.
Jurys, which operates around 30 hotels in Ireland, Britain and the United States, said earlier it had agreed to sell 4.84 acres of its prime Ballsbridge site in Dublin to businessman Sean Dunne for €260 million.
The deal, which is subject to approval by Jurys' shareholders, is expected to be completed in October with net proceeds after costs of €258 million, the company said.
Profit on the disposal would be €158.8 million, it said. "The directors of Precinct have formulated this revised proposal to reflect the potential proceeds of the Ballsbridge sale," Precinct said in a statement.
"In addition, the structure of the revised proposal, with its reduced acceptance condition, is designed to give those shareholders of Jurys Doyle who wish to have greater certainty associated with a cash exit at what the directors of Precinct believe is an attractive price the opportunity to achieve this."
Jurys invited tenders for the property, located in one of central Dublin's most prestigious districts, last month following a strategic review of its business. The site encompasses two hotels and an apartment block.
Jurys said it would continue to operate the hotels until 2007. Analysts said the higher-than-expected price agreed for the site made it less likely the board would accept any potential bid for the company from Precinct, which made its third takeover approach to Jurys earlier this month after two were rejected.
"It's highly unlikely the board is going to turn around after approving the sale of the site and approve the sale of the entire company," said Brid White at Merrion Stockbrokers. Under takeover rules Precinct, whose latest offer values Jurys at around €1 billion, has until close of business today to make a formal bid or declare its withdrawal.
Precinct said it had asked for an extension of the deadline. Jurys also gave a trading update, saying business across its hotels division in the UK and the United States, and across its inns division in Ireland and the UK was satisfactory.