FBD raises stake in Tower Hotel Group

Insurance company FBD Holdings has moved to beef up its leisure and property portfolio by increasing its stake in the Tower Hotel Group from 50 per cent to 75 per cent at a cost of €9 million.

The Tower Hotel Group, which operates a chain of hotels in Ireland, began trading in 1981 when FBD came together with Travelplan Ltd to acquire the Tower Hotel in Waterford. In the intervening years, a number of hotels have been added to the group including the Castlerosse Hotel in Killarney, the Temple Bar Hotel, Dublin, the Tower Hotel in Sligo, Faithlegg House Hotel, Waterford, and the Tower Hotel in Derry City.

FBD has raised its stake in the Tower Hotel Group by acquiring 50 per cent of the issued capital of Travelplan. That company is a holding firm with a 50 per cent stake in Tower.

One analyst said the investment was in keeping with FBD's strategy in the past two decades of investing in the property and leisure business. "They seem to have decided to make the investment simply because the opportunity has arisen, I don't think it marks any significant shift in emphasis," he said.

FBD group development manager Mr Adrian Taheny said investment in property and leisure assets, such as golf courses, had resulted in very good returns when "other investment instruments" had not performed as robustly. "This is a relatively small investment for us," he said, adding that FBD's decision to install its own management at its hotels and golf courses had reaped dividends.

The company's property and leisure interests contributed €5.1 million to operating profit in the first half, up from €3.85 million. Total interim pre-tax profits were €14.1 million. Investment return in the period declined by €3.2 million.