Citywest Hotel deal hits buffers as rival suitors return

The proposed €30 million sale of Ireland’s largest hotel has run aground after the buyers failed to meet a deadline yesterday to produce the cash to close the deal.

The 774-bedroomed Citywest Hotel in west Dublin, which includes a 4,000-seat conference centre and a golf course, was supposed to have been bought out of receivership yesterday by BSQ Investments, whose principals include Irish-born former banker Tony Lynam.

The hotel, built by the late developer Jim Mansfield, was placed into receivership in 2010 on foot of loans advanced by Bank of Scotland (Ireland).

BSQ, which has signed contracts to buy the hotel and has paid a €3 million deposit, was supposed to close the deal in mid-December. The deadline was extended to yesterday after a number of issues arose.

BSQ had already lined up Michels & Taylor, a UK hotel management company, to run the property, although it did not take over as planned yesterday following the failure of the deal to complete.

The two main underbidders, an American firm and one from Switzerland, have revived their interest in recent days, as it became clear BSQ would not complete on time.

The hotel has been the subject of protests by unpaid creditors involved in the construction of its convention centre.

The creditors are laying claim to a part of the building on land originally not part of the receivership.

BSQ receiver Martin Ferris and Michels & Taylor all declined to comment yesterday.

Dalata, the hotel company run by former Jurys boss Pat McCann, confirmed last night it would run Citywest until the hotel's future is resolved.

Sources suggested Dalata, which has confirmed it is planning a flotation to raise up to €200 million, is also planning to make a bid for Citywest.

Dalata said last night it would assess the situation if the hotel came back on the market. Dalata, which operates 34 hotels, confirmed it will list on the stock exchanges in Dublin and London next month.