Ryan buys Cork Metropole

Ryan Hotels concluded 10 weeks of negotiations to purchase Cork's Metropole Hotel from the Fitzwilliam Hotel Group yesterday in a deal worth £7.6 million (€9.65 million). The hotel will be renamed the Metropole Ryan Hotel. The attached Leeside Leisure Centre is to be leased at a cost of £50,000 per annum with a put-and-call option on this property for £1.5 million in 2008.

Mr Patrick Coyle, Ryan's chief executive, said the group intended to avail of the option. At a cost of £54,292 per room for the 113-room hotel, he said it was a very good price to pay, particularly as the premises came with £2.6 million of capital allowances which could be offset against profits. "The average price of our portfolio is over £100,000 per room," he said.

The chief executive of Fitzwilliam, Mr Michael Holland, said the group had decided to concentrate on its Dublin interests which included the Portmarnock Hotel and Golf Links, the Royal Dublin Hotel and the Fitzwilliam Hotel.

The acquisition, funded from debt, brought the number of hotels in the group's control to nine, six of which were in the Republic. It now has 1,247 bedrooms in total. It is the first presence that Ryan has in Cork which was important from a customer point of view, Mr Coyle said. "We are in all the major cities at this stage. There is not a pressing need to invest further in Ireland. The next acquisition will be in the UK," he said.

Mr Coyle added that a refurbishment programme for the reception, bars and conference areas, and the facade, would follow. The combined property's net-asset value amounted to £3.4 million. "Basically we are going to do what we did with the Gresham. It is the landmark hotel in Cork," he said.

The acquisition leaves Ryan with a bank gearing ratio of 19 per cent and a total gearing ratio, which includes lease obligations, of 41.5 per cent. The operating profits before depreciation of the combined hotel and leisure centre for the last financial year was £578,000.