Offers fall short in £1 billion Travelodge hotel auction

Thu, 03 Mar 2016 | BUSINESS SALE

The estimated £1 billion auction of budget Travelodge hotels has been put on hold by the firm’s chief executive, reports The Times.

Peter Gowers, the Travelodge CEO, said: “We conducted a strategic review before Christmas [2015], but with trading going as it is our owners are now perfectly comfortable holding on.”

Mr Gowers added that there were “still people talking”, but that nothing was likely to happen with the sale in 2016 as there was “no formal sale process” taking place.

The hotel chain is owned by Goldman Sachs, Avenue Capital and GoldenTree Asset Management after the investment firms brought the distressed business out of a debt crisis three years ago. They subsequently put 519 of the group’s budget hotels up for sale through Deutsche Bank in late 2015.

The previous frontrunners to buy the hotels, Starwood Capital and Apollo Global Management, have both submitted unsuccessful final offers — rejected because they fell short of expectations. Both firms had expressed interest in buying a smaller £600 million property portfolio made up of 144 Travelodge assets, but this also seems to have fallen through.

Travelodge has posted some very positive figures in the last year, with a record 18 million customers and forecasted earnings of £100 million for the first time. This figure is up from £40.5 million in 2013 and £66 million in 2014. Turnover increased by 13 per cent, too, up to £558 million.

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