The Jurys Doyle group is set to realise at least €250 million from the sale of the Burlington Hotel in Dublin in a move that will result in the loss of 188 full-time and 296 part-time jobs next year.
The move to put the hotel on the market came as the hotel group disclosed an 18 per cent rise in operating profits to €125 million in 2006 and an 11 per cent rise in turnover to €355 million.
The heavily-indebted group, controlled by the family of the late PV Doyle, plans to use the sale proceeds of the Burlington to invest €200 million in its existing premium hotels and make new acquisitions on the US east coast and Europe.
Following a strategic review, Merrill Lynch is advising Jurys Doyle on the strategic options for its budget Jurys Inn chain.
The objective of this process is to realise money to reduce its debts, which amount to some €870 million. Options include the outright sale of the chain, which has 20 sites in Ireland and Britain, or the sale of a significant minority stake.
The Burlington will be pitched to property investors as an opportunity to redevelop a prestigious Dublin 4 site that fronts onto Upper Leeson Street, Sussex Road and Burlington Road.
The sale of the landmark hotel comes soon after the disposal for €100 million by insurance group Allianz of its building on Burlington Road. Developer Bernard McNamara ranks among the new owners of that site, which was valued at €66 million per acre.
That suggests a crude valuation of more than €244 million for the 3.7-acre Burlington site.
However, the fact that the hotel site is of a greater scale and offers access onto Sussex Road suggests it will realise a higher price than the Allianz building.
Jurys Doyle appointed property consultants CBRE to manage the Burlington sale, a process which will continue for several months. "The hotel is expected to stay fully open for business throughout 2007," it said.
"The value of the property has appreciated significantly in the past 12 months, particularly in light of a recent transaction in the area, and the decision to sell the hotel has been made to realise the value of this asset so that the group can reinvest in premium hotels."
There will be little scope to redeploy Burlington staff within the group. They are likely to be offered a severance package in anticipation of likely closure of the hotel in 2008.
The latest sale follows the disposal in 2005 of the three Ballsbridge hotels in Jurys Doyle chain to property developer Seán Dunne. That came amid an intensive takeover saga that saw the group return to the ownership of the Doyle family through their vehicle JDH Acquisitions.
PV Doyle's eldest daughter Bernie Gallagher, chairman of JDH Acquisitions, said the decision to sell the Burlington was difficult but was influenced by the significant investment that the hotel required.
The strategic review of the group was led by her husband John Gallagher through a corporate advisory vehicle called Crownway Investments.
