Permira looks to muscle in on £1bn hotel deal

The UK-based private equity firm is trying to crash the party for the De Vere hotel and leisure chain after two years of courting the business.

Permira, a UK buyout group, is working flat-out on a bid for De Vere Group, a hotel and leisure chain, in an attempt to derail a recommended £1 billion ($1.8 billion; €1.4 billion) bid from Richard Balfour-Lynn’s Alternative Hotel Group.

Martin Clarke, partner and Permira’s head of consumer business, is pushing through due diligence on De Vere, which has recommended AHG’s 825p-a-share offer to its shareholders. A source close to the firm said Permira was in open dialogue with De Vere’s management and it would decide whether to bid in the next seven to 10 days.

In a statement, Permira confirmed that it had been “considering whether to make an offer” for De Vere Group and urged shareholders to take no action in respect of the offer from AHG while it considered its position.

Shares of De Vere, which also owns the Village Hotels & Leisure Clubs brand and the Greens health club chain, rose 32½p to 847p on the back of speculation that Permira would try to outbid AHG in the next few days.

Permira is believed to have made an informal offer of 600p a share two years ago. It renewed its interest in March when De Vere received an approach from NH Hoteles, a Spanish company.

Its partner in the bid is Principal Hotels, a chain of six hotels controlled by Royal Bank of Scotland and its chief executive, Tony Troy. If it succeeds in buying De Vere, Permira would buy Principal for about £300 million and merge it with De Vere.