New approach to Jurys values chain at €1bn

Jurys Doyle has received a new approach from Precinct Investments that values the hotel group at slightly more than €1 billion.

The approach at €16.25 per share was made public in an announcement to the stock exchange yesterday afternoon.

The hotel company's board rebuffed an approach at €15.25 from Precinct two weeks ago saying it "failed to reflect the value of Jurys Doyle and its prospects".

The new approach represents a 33 per cent premium on Jurys share price before the current takeover speculation began and a €63 million increase on Precinct's earlier proposal.

Jurys said the latest move is "preliminary in nature" and is subject to conditions. There can be "no certainty" that an offer will ultimately be forthcoming, the board noted.

Precinct said last night that it hoped to progress its interest with the hotel group.

The Jurys board has not yet engaged in any depth with Precinct, which is led by Dublin property developer, Bryan Cullen.

The consortium also includes solicitor David Coleman and Wexford builder and hotelier JJ Murphy.

The three investors are particularly interested in gaining control of the eight-acre Jurys site at Ballsbridge in Dublin, one of the State's most desirable addresses.

The property has been valued by property experts at €200 million.

If they are successful in taking over the company, the three hotels that occupy this site - the Jurys Ballsbridge hotel, the Berkeley Court and the Towers - would probably be demolished in favour of a residential development. A similar development could be expected on the site currently occupied by the Jurys Montrose Hotel in Dublin's Stillorgan.

Precinct would then be likely to retain the Burlington Hotel, also in Ballsbridge, and invite an international hotel management company to operate it.

Jurys as a whole comprises 33 properties in the Republic, the UK, and the US. The best performer in the group is the 18-strong Jurys Inns chain, which could be sold off by a buyer who would presumably be seeking to pay down debt. Analysts have estimated however that any purchaser breaking up the group would leave themselves open to a tax bill of up to €200 million.

Bríd White, analyst with Merrion Stockbrokers, yesterday questioned the basis for an approach at €16.25. She believes that the only way to justify an offer at this level would be to value the Ballsbridge site at close to €300 million.

As with the previous approach, the balance of power on this occasion lies with the Doyle and Beatty families, who together own 30 per cent of Jurys Doyle and occupy four seats on its board. Consideration of the new move comes as Jurys prepares to invite tenders for its own redevelopment of the Ballsbridge site.

Shares in Jurys shot up as soon as the market opened and gaining further momentum when the statement came out. The stock closed at €16.00, up 80 cents .