Lone Star to check out of Jurys Inn hotel chain

The Jurys Inn hotel chain has been put up for sale by its owner, US private-equity group Lone Star, along with a number of Hilton hotels.

The portfolio is believed to be worth about £1 billion (€1.15 billion) with Credit Suisse and Eastdil Secured hired to advise on options for the 36 Jurys Inns and six Hilton hotels.

The properties are run by Amaris Hospitality, which is led by Irishman John Brennan and manages 89 hotels.

The sale will affect six hotels in Ireland – Jurys Inns at Christchurch and Parnell Street in Dublin, and properties in Cork, Galway and Belfast. It also includes the Hilton Garden Inn at Customs Quay in Dublin, which was previously a Jurys Inn.

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Neither Lone Star nor Amaris would comment on the process.

According to a report in the Times newspaper in London, a sale is said to be the preferred exit, while an initial public offering has not been ruled out. The company is reported to be willing to sell the brands separately.

Investment programmes

Lone Star bought Jurys Inn for €900 million in 2015, and sold some hotels, rebranded others and completed a £100 million investment programme. A further £30 million investment has just started.

Lone Star acquired the chain of 31 hotels from a group of investors: the Oman Investment Fund, Mount Kellett Capital Management, Ulster Bank, Westmont Hospitality Group and Avestus Capital Partners.

Jurys Inn was originally set up as part of the old Jurys Doyle stock-market listed company. It was sold in 2007 for €1.166 billion to a group of investors put together by financier Derek Quinlan.

Mr Quinlan subsequently sold half the equity to Oman Investment Fund but it ran into difficulties with its lenders following the 2008 global financial crash. In 2013, the hotel chain succeeded in restructuring its debt, agreeing a debt write-off of £290 million with its banks, which included Irish Bank Resolution Corporation, AIB and Ulster Bank.

Lone Star is also known in the Republic as the buyer of hundreds of millions of euro of troubled mortgages that it has moved to restructure and, in some cases, sell forward or use to to back bonds.

Funds controlled by the Dallas-based firm, founded by billionaire financier John Grayken, own 600 acres of land in Dublin with the potential for 7,000 homes. In Adamstown, it has partnered with developer Joe O’Reilly’s Castlethorn Construction, while in Portmarnock it is working with Ballymore Development. The funds also hold land in Skerries.