Pedersen leads the bidding for troubled Queens Moat Houses

26 May 2004
Pedersen leads the bidding for troubled Queens Moat Houses

Maurice Gourgey's Pedersen Group is understood to be the frontrunner in the race to buy troubled hotel group Queens Moat Houses (QMH) and is expected to complete the deal by 7 July.

Pedersen is said to have bid about £360m for QMH's UK portfolio but will apparently run only a few of the hotels itself, relinquishing control of the rest to French hotel giant Accor.

The other shortlisted bidder in the auction, a consortium of US investor Colony Capital and Accor, is understood to be considering whether to increase its offer.

But speculation about yet another bid for QMH was mounting this week as a party involving investment bank Goldman Sachs and US hotel company Westmont Hospitality Group bought a 19% stake in the hotel group, taking its holding to 29.6%.

The purchase has been greeted with surprise by analysts, however, after QMH admitted that a sale of the company was likely to leave shareholders with nothing.

Debt-laden QMH was put up for sale in January, two months after the group appointed investment bank Morgan Stanley to conduct a review of the business.

The group's £640m debt dates back to its near-collapse more than 10 years ago, which resulted in a massive write-down of its assets and the ousting of its board. Since then QMH has been selling off hotels in a bid to reduce its debt burden, but was pushed further into the red following the outbreak of foot-and-mouth disease, the 11 September terror attacks and the general economic slow-down.

Source: Caterer & Hotelkeeper magazine, 27 May - 2 June 2004

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