Morans to pick up Red Cow complex from Dalata

Hotelier Tom Moran and his family are negotiating to acquire the well-known Red Cow complex as part of a wider transaction that will involve the Dalata Hotel Group purchasing the Moran chain of properties in Ireland and the UK.

It is understood that Mr Moran and his family would acquire the Red Cow for about €8 million from Dalata, a company listed on stock markets in Dublin and London that is on the verge of purchasing the entire hotel chain.

The complex, which is situated near the Newlands Cross junction in southwest Dublin, comprises the four-star, 123-bedroom hotel, and the Red Cow Inn. The hotel and pub employ around 140 staff between them.

Mr Moran and his family are also interested in acquiring other properties in their chain, but it is not clear if these deals will come off.

Group’s founder

The Limerick-born businessman is set to lose control of the rest of group he founded 26 years ago to Dalata following a sale process that began in the late summer.

Shares in Dalata were suspended yesterday pending the outcome of exclusive talks to acquire the Moran group.

It is understood that Dalata submitted a bid of just more than €460 million, considerably ahead of the underbidder, London & Regional (L&R), which owns the Four Seasons in Ballsbridge and is controlled by the British brothers Richard and Ian Livingstone.

L&R is believed to have offered €428 million, slightly higher than the other underbidder, Starwood Capital Group.

The Moran hotel chain comprises 10 properties in Dublin, Cork, London, Leeds and Manchester, with 2,627 rooms. It operates the Moran and Bewleys brand, neither of which is expected to be used by Dalata.

The Moran group is expected to post revenues this year of around €104 million and Ebitda – earnings before interest, tax, depreciation and amortisation – of close to €33 million.

While successful in a trading sense, the company has been burdened in recent years by debt – a legacy of its €580 million purchase of Bewleys hotels from Bert Allen more than six years ago.

The Moran chain completed a financial restructuring last year that resulted in the group receiving a capital injection of €125 million and its net debt being cut by €490 million to €205 million.

Lenders

This also involved its lenders –

AIB

,

Bank of Ireland

and

Canyon Capital

in the US – taking significant equity stakes in the hotel group.

In a stock exchange announcement yesterday, Dalata confirmed that it was in exclusive discussions in relation to the “potential acquisition” of the Moran group.

Dalata said a deal would be completed by way of a “reverse takeover” and would be conditional on the consent of its shareholders.

“Dalata’s shares will now be suspended from trading pending the conclusion of discussions in relation to the potential acquisition or the publication of an admission document for the enlarged group,” it added.

The Irish Times understands that Dalata was granted a 30-day period of exclusivity last week by the board of the Moran group.

The company said there was “no certainty” that the transaction would proceed and shareholders would be updated in “due course”. Dalata’s chief executive, Pat McCann, was unavailable for comment yesterday.