Jurys will become the largest hotel group in the State when it completes its takeover of the Doyle Hotel Group, possibly within six to eight weeks.
Jurys is paying €238.2 million (£187.6 million) in cash and new Jury shares and will assume estimated debts of €76.3 million (£60 million) to acquire Doyle's. Jurys is paying £119,000 per room for the hotels. The €314.4 million deal will create the Republic's largest hotel group and give the group its first hotels in the US, as well as a third hotel in London.
The Jurys Doyle group will have 19 hotels and nine inns containing 5,200 rooms throughout Ireland, Britain and the US. It will have an annual turnover of more than €178 million (£140 million), 3,500 employees, and full-year profits before interest, tax and goodwill charges of about £47 million.
The terms agreed will give Thornhill - the holding company for the Doyle Group which is owned by family members of the late P.V. Doyle - a 25 per cent stake in the enlarged Jurys, making it the largest single shareholder.
The Doyle family has supplied Jurys with the warrants and indemnities it sought. As well as the usual indemnities acquirers seek from vendors in such transactions, it is understood that Jurys sought indemnities against any tax liability that may arise for the Doyle Group from the findings of the Moriarty Tribunal.
Under the terms of the deal, Jurys will make a cash payment of €115.3 million to Thornhill and will issue 14.8 million new ordinary Jurys shares valued at €122.9 million based on the closing price per share of €8.30 on April 15th.
The Doyle family has agreed not to sell any Jurys shares before November 30th, 2000 and not to sell its shares within five years without board approval.
Doyle family members Mrs Bernie Gallagher and Mrs Eileen Monahan, together with Mr Tom Roche as a nominee of Mrs Ann Roche, will be co-opted as non-executive directors to the new board. Mrs Margaret Doyle, the widow of P.V. Doyle, will be given an honorary non-board position of group life president.
Jurys will fund the deal through borrowings and the issue of new shares, with no call on existing shareholders. Jurys chairman, Mr Walter Beatty will be chairman of the merged operation. Jurys managing director, Mr Peter Malone, has agreed to remain on while the integration is taking place. When he retires in a year, he will be replaced by Jurys existing chief executive designate, Mr Pat McCann. Jurys' shareholders will have to approve the deal at an extraordinary general meeting in May, as will the Competition Authority. The combined group will have about 20 per cent of the market in the greater Dublin area and about 57 per cent of the Irish market outside Dublin. Jurys has applied to the Irish Stock Exchange to have the new shares listed.
No hotel sales are anticipated as a result of the merger and no redundancies are expected, according to Mr Beatty. He said the acquisition was "the right step at the right time" for his group.
The group is expected to have a market capitalisation of about £400 million with 59.2 shares in issue after the deal compared with Jurys pre-announcement capitalisation of £290 million.
The strategic rationale for the combination of the Jurys and Doyle businesses was compelling, he said. "Jurys Doyle Hotel Group will have the scale and scope to sustain strong organic growth and to develop through further acquisition. The transaction represents a unique opportunity for both companies to take a major step forward and create a powerful Irish hotel group with sufficient scale to compete internationally," he said.
