NEW Zealand's Brierley Investments Limited (BIL) said yesterday it had appointed advisers on a possible float of its Thistle Hotels chain to increase the investment group's liquidity.
Thistle, with 100 luxury hotels, is the second-largest hotels group in the UK after Granada. With 25 hotels in Scotland, it is the largest north of the Border.
A BIL spokesman said that chief executive Paul Collins was on record as seeking greater liquidity for the New Zealand company.
Around 45% of BIL's capital base is tied up in its 70% stake in Thistle, formerly Mount Charlotte. The rest of Thistle is held by the government of Singapore and its investment fund Temasek, which also owns 6.5% of BIL.
BIL said it had appointed Baring Brothers and Merrill Lynch as advisers on a possible float. ``The aim of a possible flotation would be to get it to the market later this year or early next,'' the spokesman said.
Robert Peel, the Scottish-born chief executive of Thistle Hotels, has said a flotation would be a desirable option from a personal perspective.
David Copley, analyst at Cavill White Securities, speculated BIL may seek to unload around half of its stake in Thistle. ``I think they're keen to see their exposure in the UK reduced, given that they're trying to refocus into Asia and into Australia,'' he said.
``They're aware that the market's negative on Thistle and they've got to make sure they get out at the right part of the cycle, otherwise they could be left holding the baby again.''
The Mount Charlotte purchase had been very negative for BIL and acknowledged as such by its executives. It was forced to make a full takeover in 1990 after taking its shareholding above 30%. The move was ambushed by the Gulf war, which badly affected the British tourism market and the share values of British hotels.
Mr Collins said in BIL's 1995 annual report that the Mount Charlotte buy was a ``major drag'' on the company in the early 1990s but the hotel group once again had good prospects.
He said then that if Mount Charlotte was sold at book value for cash the BIL parent company would have NZ$1000m (#444m) in cash and no senior debt. ``Under this scenario the group could also find itself with excess capital,'' he said.
BIL holds around 658 million shares in Thistle, which reported a 50% rise in pre-tax profit to #34.8m in 1995. Analysts value the hotel group at around 90p to 113p per share.
Copley said the likelihood of a share buy-back, mooted previously by BIL, had diminished as the price of its stock had risen. BIL ended four cents higher at NZ$1.42 yesterday.
``You don't buy your shares back when you view them as fairly priced or expensive,'' he said, adding that Asia and Australia were the likeliest markets for BIL to reinvest proceeds from a float of Thistle. - Reuter.
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