LONDON—Reports of a sale of the newly rebranded United Kingdom Mint Hotel chain are somewhat premature, David Orr CEO and co-
founder told HotelNewsNow.com.
Word is spreading through the U.K. press that JP Morgan has been brought in to discuss a £550-million (US$875.4-million) sale.
The part-family owned chain was rebranded from City Inn to Mint Hotel in November, as it was thought that the previous name did not reflect the high design, iMac-filled rooms of these strictly city centre properties.
• Read “City Inn rebrands as Mint Hotel, plans growth”
Orr, who established the chain along with his father in 1995, seemed bemused as to how the sale term came to be discussed: “We’re not selling it at all. What we’re doing is looking to get the top advisers in the industry, and JP Morgan are the top advisers in the industry, to sit with us and look at the options as to how we can find a new partner in going forward with expanding the business.
“This is not really that different from what we have been trying to do for a long time and that is to expand into Europe. I don’t quite know what the ‘sale’ word is there”.
With plans to expand across the continent, Orr said investment is inevitably going to be needed: “These buildings are city centre; they are very prime sites and incredibly expensive sites buildings to buy sites for. They are class-leading hotels that we are creating. Clearly you need to have a source of funds to be able to continue to do that. What this process is about is opening up opportunities for us as we grow the business to have other people who might have similar interests. For example, we’re opening up in Amsterdam, we would like to open up in Rome and we’d like to open up in Paris. That will take a long time … investment and take a lot of hard work, all of which we really want to do. The evidence of the Tower of London hotel and Amsterdam will be supportive of a process, which is being lead by the leading experts in the industry, and JP Morgan will be leading that process”.
Speculating as to how a sale came to be envisaged, Orr said that within discussions about potential investments “people have been making comments about the underlying value of the business and that seems to have got people talking about sale. This is about organising the business in the right way for the future, it’s not about sale, it’s about investors coming in alongside us and how we’re going to grow the business. It was a confidential process”.
Less confidential now the U.K. business press has been openly debating the potential business worth, a valuation which Orr said is well below the number estimated by other sources.
“I can’t make any direct comment about the numbers, but the numbers quoted by independent valuations are very much higher than this number”.
The ownership of Mint Hotel has remained the same since December 1998, which Orr said is “52% of private investors of which the founders principally hold that, and 47.5% HBOS, which is now owned by Lloyds banking group”.
As well as Amsterdam, which will open at the end of March, and plans for Paris, and Rome, the company also is looking at potential properties in Milan, Barcelona and Madrid.
Orr acknowledged however “until you’ve secured a site you can’t do anything. These things take a long time to deliver. We are materially down the road in each of these cities but we don’t have the actual sites yet”.
As to whether a sale is a potential future development, Orr maintains, “Any company is up for sale to a certain extent. We’re as for sale as Tesco is. Companies with shares, that want to raise capitals to expand, they have a number of routes down which they might go.”
But he is equally adamant that this is not what is being discussed at this time.
“To my mind this is really about how you grow the business. Genuinely, this is a proper growth story. We actually think that so many hotel companies are fantastic, high quality businesses that do lots of good things and employ people well and provide career paths. We want to join the party”.