SIPP.L Regulatory News (SIPP)

27 Jun 2005 07:00

Hotel Corp (The) PLC27 June 2005 The Hotel Corporation plc ("The Hotel Corporation" or the "Company") Acquisition of Walton Hall by DSH for £15m The Hotel Corporation, the AIM quoted investment company established as avehicle for public company investors to invest in DSH, is pleased to announce afurther acquisition of a major hotel and conference venue by Dawnay Shore Hotelsplc ("DSH"). DSH is the hotel group established by Dawnay, Day and ShoreCapital in 2004 to build a chain of four star hotels in the UK. DSH has astated intention of making complementary acquisitions in the sector. Highlights • DSH has acquired a large existing time-share and leisurecomplex, Walton Hall at Wellesbourne, near Stratford Upon Avon. Walton Hallhouses 132 time-share units, whose interests have been bought out. DSH hasobtained planning consent to convert the property into a high quality four starcountry hotel and spa with around 200 rooms, substantial conference facilities,leisure and fitness. DSH will operate it as a hotel from acquisition. • The purchase consideration is £15.2m and is to be financedfrom internal resources and an additional facility from DSH's bank. Theproperty has a 104 year lease with a modest ground rent. • Built in the 1860s (designed by Sir Gilbert Scott) andsituated within grounds of 65 acres, this listed property is highlycomplementary with DSH's existing portfolio of hotels, many of which havearchitectural and historical significance. • The facilities of the existing property include tworestaurants, two bars, an indoor and outdoor swimming pool, 2 tennis courts afitness and leisure club, a main event room and meeting rooms. The propertycurrently has a thriving business hosting weddings, conferences and otherevents. • While the existing character of the main house will bemaintained, DSH proposes to upgrade the property. The works will convert thetime-share units into hotel bedrooms and, in some cases, to meeting rooms(increasing the number from 3 to 10). Subject to planning, it is also proposedto build a new 10,000 sq ft conference facility. The total cost of these worksis likely to be around £10m. • Initial refurbishment is expected to start in January 2006and the internal works should be completed by the summer of 2006, when the hotelwill be re-launched with the Paramount brand of distinction. The new conferencefacility is expected to be completed by the summer of 2007. • DSH has immediate ownership of the property and willprovide continuity on all existing and ongoing bookings (some existingtime-share bookings, plus events). Walton Hall is expected to contribute toDSH's operating profit from inception, although at a lower rate until therefurbishment is completed. Charles Prew, chief executive of Paramount Hotels, said: "This is a stunning property which I am sure is destined to become one of ourflagship hotels. We remain convinced that four star regional hotels which canoffer full conference and leisure facilities will continue to be attractive toboth the corporate and leisure markets. This represents an important niche forus to occupy and build a major group of hotels." Barclay Douglas, chairman of The Hotel Corporation, said: "We are delighted to see that DSH has made another acquisition which looks tohave the potential for a significant uplift in value." Press enquiries:The Hotel Corporation plcBarclay Douglas 01256 889895 Shore CapitalHoward Shore 020 7468 7911Graham Shore Dawnay, Day Hotel ManagementCharles Prew 01132 380033 Citigate Dewe Rogerson:Margaret George 0207 638 9571Fiona Mulcahy Notes for Editors The initial hotel portfolio of DSH consists of 13 hotels, acquired as theParamount chain in July 2004, together with 3 additional hotels acquired fromsubsidiary companies of Hanover International plc in January 2005. The Paramount chain consists of properties throughout Britain, including theCarlton Hotel in Edinburgh, the Oxford Hotel in Oxford, the Majestic Hotel inHarrogate, the Imperial Hotel in Torquay and the Marine Hotel in Troon, wherethe British Open was held in 2004. The hotels cater for both business andleisure guests, each being between 90 and 200 rooms with substantial conference,banqueting and leisure facilities (including fitness). The three formerlyHanover hotels are substantial four star hotels, at Hinckley, Daventry andBasingstoke. In total DSH's hotels have about 2,400 rooms, with maximumconference facilities for over 15,000 persons. This information is provided by RNS The company news service from the London Stock Exchange