Quinn set to buy Belfry for €270m

Quinn Group is set to buy one of the best-known golf courses in the world in a €270 million deal.

The Fermanagh-based group has agreed to buy the Belfry golf course and hotel complex in the UK from its current owner, the London-listed De Vere Group, for £186 million (€270 million).

The Belfry is located near Birmingham in the English midlands and is the headquarters of the European Professional Golfers' Association (PGA), which governs the professional tournaments in Europe.

It has hosted four Ryder Cups, the competition that pits teams of European and US professionals against each other. Irish fans of the sport will remember it as the place where Paul McGinley sank the putt that won the trophy for Europe in 2002.

De Vere shareholders have to approve the sale in an extraordinary general meeting before it can go ahead.

However, it is unlikely that this will be a problem. De Vere intends to make a special cash dividend payment totalling €265 million or approximately €2.31 a share to stakeholders as a result of the sale. The dividend is the total value of the deal minus the transaction costs.

A De Vere statement said: "The board considers that returning all of this cash would be in the best interests of shareholders."

It will continue to manage the property for the next 25 years.

De Vere's shares jumped 12 per cent or 62.5p to close at 563.25p in London last night.

The company's books value the property at €183 million. The Quinn offer is a 46 per cent premium on this. De Vere recently had the Belfry revalued and the €183 million includes a revaluation surplus of €78 million.

De Vere said yesterday that it would post a circular to shareholders giving details of the proposed sale and the €78 million surplus.

Yesterday the company said that, in the year ended September 26th, 2004, The Belfry had earnings before interest, tax and writeoffs of €21 million on sales of €50 million. Operating profits were €17.7 million.

In the previous year, the business turned over €46.4 million and had earnings before interest and tax of €19.6 million. Operating profits were €16.25 million.

The Seán Quinn-controlled Quinn Group began working on the acquisition within the past six weeks, shortly after an unsuccessful bid for Wentworth golf club in Sussex, southern England.

It is understood that the group was approached as a result of its interest in that facility. The deal took six to seven weeks to complete.

Quinn intends to fund the purchase through a mixture of cash and debt but it declined to give a breakdown yesterday. It recently expanded its glass manufacturing and insurance businesses to the UK, where it also owns a number of hotels.

Quinn chief executive Mr Liam McCaffrey said yesterday that the acquisition represented an exciting new phase in its UK expansion plans.