Permira urges restraint on new De Vere bid

Following an increased offer of 850 pence per share from Richard Balfour-Lynn’s Alternative Hotel Group, Permira has asked shareholders to take no action as it considers whether to make its own bid.

Permira, the European buyout firm, has again urged shareholders in De Vere Group, a hotel and leisure chain, to take no action following a revised offer from Richard Balfour-Lynn’s Alternative Hotel Group.
 
Permira said in a statement that it is considering making a counter offer for De Vere Group after Alternative Hotel Group increased its cash offer from 825 pence per share, made three days ago, to 850 pence. The revised offer values De Vere Group at approximately £745 million (€1.07 billion)
 
According to The Financial Times, Permira was working on a 840 pence share offer for De Vere. At 12pm GMT today, De Vere’s shares were trading at 863 pence, up from yesterday’s closing price of 846 pence.

Permira has partnered with Principal Hotels, a chain of hotels controlled by Royal Bank of Scotland, on its bid for De Vere. If successful, it is understood that Permira will buy Principal Hotels for approximately £300 million and merge it with De Vere.

If Balfour-Lynn’s offer is accepted by De Vere’s shareholders, it will be the third time in recent months that Permira has been thwarted in taking a public company private. In March, Permira gave up its pursuit of HMV, the UK music and entertainment retailer after the company rejected two take-private bids.
 
Also in March, Permira pulled out of the original private equity consortium bidding to buy Dutch media and marketing group VNU over concerns that a €7.5 billion preliminary offer was too high. The consortium, Valcon Acquisition, finally had its €8.7 billion offer accepted in May.
 
According to the FT, Permira is not the first private equity firm to have shown an interest in the hotel chain. De Vere is reported to have received a preliminary approach from The Blackstone Group, a US-based private equity firm, in March having previously offered 750 pence a share for the company last year