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BIL bids to take out Thistle minorities

Says being in public arena doesn’t work

BIL International Ltd, now controlled by Hong Leong Malaysia’s LC Quek, said it intended to acquire the 54.2% of Thistle Hotels plc it doesn’t already own at 115p cash/share.

The share price on 20 February, the day before BIL said it was contemplating making an offer, Thistle’s share price was 100p.

BIL said the offer represented a 22.1 times multiple of Thistle’s adjusted earnings/share from continuing operations for the year to 29 December and a multiple of 0.55 times Thistle’s asset backing.

It valued Thistle at £554.7 million and would require a £300.5 million outlay.

Thistle has been a veritable thorn in the BIL backside ever since the former Brierley Investments bought it in 1991, when it was called Mt Charlotte Investments plc. The business was too big for Brierley to digest, couldn’t be turned round in a hurry and couldn’t be sold off.

It was floated in 1996. The current BIL said its rational for buying up minorities was that Thistle hadn’t performed to its potential, its share price had suffered and further development would be best achieved in the private arena, “away from the cyclicality of the public equity markets which, given the current uncertain global economic & political climate, BIL believes are unlikely to benefit existing Thistle shareholders.”

Thistle has 56 hotels, 18 of which are owned or leased & 38 managed, 22 of them in London. It sold 37 hotel businesses to Gamma Four Ltd in April 2002 for £598.6 million, including £45 million of deferred consideration. The transaction also involved Thistle entering into agreements to continue managing these hotels for up to 30 years.

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