Acquisition Resources

Dawnay Shore Hotels, the hotel group established by Dawnay, Day and Shore Capital in 2004, which owns and operates a chain of twenty leading four and five star hotels in the UK, has announced the outcome of its strategic review.

DSH has entered into an agreement which will lead to Barceló, a leading international hospitality group, leasing and taking over the management of Paramount Hotels. 

The long term 45 year agreement will provide a secure income stream which will be inflation indexed and with further potential for rises depending on hotel profit performance.

The deal will lead to an increased value of the portfolio (excluding certain peripheral land) of £556.25m, and allows investors to benefit from considerable development potential and active asset management.

DSH plans to unlock value by increasing gearing and returning capital to shareholders. The deal also provides a platform for DSH to expand in the hotel sector. More acquisitions to be targeted, and a strategic alliance with Barceló will play an important part in the company’s growth.

Howard Shore, Shore Capital’s chairman and a DSH director, said:“We are delighted to have concluded this value enhancing transaction after a careful review of all the options. As a result, shareholders will be able to crystallise the benefits of their investment whilst continuing to benefit from significant real estate potential.”

Peter Klimt, Dawnay, Day’s Chief Executive and a DSH director, said:“As a result of the secure income stream generated by the leases and the resultant higher property valuation, DSH should be able to return further value to shareholders. We have today laid the foundations for DSH to grow into a major owner of hotel property.”

The Company will remain in an offer period pending a review of its capital structure and a potential corporate reorganisation following completion of the transaction. A further announcement will be made at the appropriate time.