Holding these for shareholder discount and the belief that someone will come along with a plan on what to do with them .....

Now could be the right time to get in for a ride northwards with little downside risk


ains


Thread started at 95p mid - currently at a high of 129p - up 35.79%








Investec Securities took the stock off its "sell" list citing among other factors the potential for "corporate action".


Banks call in Ernst & Young to check out Thistle Hotels
By Lauren Mills and Damian Reece (Filed: 02/02/2003)


Thistle Hotels' bankers, led by the Royal Bank of Scotland, have hired Ernst & Young to carry out a review of the business which could lead to sweeping management changes and disposals at the hotels group.

Although Thistle has around 320m in the bank, the banks are thought to be alarmed at the group's precarious trading position. They are also said to be questioning the ability of the management to steer the company through a period of uncertainty in the market.

In January, Thistle revealed a 10.5 per cent drop in average room rates in London last year. It also refused to give details of how it planned to spend the cash raised through the disposal of 31 regional hotels to Orb Estates last March for 600m. As part of the deal, Thistle retained management contracts to run the hotels.

The group also admitted it would be difficult to forecast turnover for 2003 because it remained "cautious as to when there will be a recovery in general hotel trading conditions".

Ernst & Young is expected to report back to the banks on the company's overall financial strength within the next two weeks. E&Y is likely to focus on current trading, as well as prospects for improving performance in a relentlessly difficult market.

The accountancy firm will also advise the banks on a range of strategic options including further disposals.

Thistle's shares rallied 9p to 98p at the end of last week after Investec Securities cited "corporate activity" as a reason for taking the stock off its "sell" list.

Ian Burke, the chief executive, is under mounting pressure to clarify whether he plans to return the cash to shareholders or spend it on acquisitions.

His indecision is causing friction among Thistle's leading institutional shareholders who hold differing views about what should be done with the cash.

The two biggest shareholders, each of which has a seat on the board, are BIL International, which owns 45.8 per cent, and the Government of Singapore which has a 13.1 per cent stake.

Other large investors include Havelock Investments and Tweedy Brown Company.

A spokesman for the company insisted it knew nothing of E&Y's review. He also confirmed that Burke would update the City with a strategic plan for the group when it announces its year-end results in early March.

Brierley group considers offer for Thistle Hotels
By Susie Mesure INDY
22 February 2003


Thistle hotels yesterday joined the list of British hoteliers being stalked by would-be predators after BIL International, its majority shareholder, admitted it was considering making an offer.

BIL, a Singapore-based investment group, said its board was considering launching a bid "at a modest premium" to Thistle's share price as of Thursday's close of 100p. It is thought that BIL, whose president is the New Zealand entrepreneur Sir Ron Brierley, was forced by the Takeover Panel to issue a statement in response to a sharp rise in Thistle's share price. Thistle's stock climbed 7.5 per cent to 107.5p, valuing the group at just under 520m.

In response, Thistle said it had "not received any formal approach from BIL regarding a possible offer". Ian Burke, its chief executive, has come under fire for dithering about what to do with 600m he raised in April by selling 37 of its hotels but while retaining the management rights.

BIL, which floated Thistle in 1996 at 170p a share, said there could be "no assurance that any offer will be forthcoming". It has a 46 per cent stake in Thistle.

This is the second time in four months that Thistle has been the subject of takeover speculation. Last month, Orb Estates, a Jersey-based investment group that bought the 37 Thistle sites in March, decided against a bid for the London hotelier.

Peter Joseph, an analyst at KBC Peel Hunt, said: "The group has got itself in a pickle over its balance sheet but I can't understand why it's worth less than 150p to 175p per share."

MAIL


Thistle's top investor mulls takeover
James Rossiter, Evening Standard 21 February 2003

ECRETIVE Far Eastern investors are set to pay 260m to take over Thistle Hotels group, owner of hotels such as the Tower Thistle. BIL International, a Singapore-based investment company run by financier Arun Amarsi, has confirmed it is considering an offer at a 'modest premium' to the 98 1/2p at which Thistle shares closed on 18 February. It already holds 46% of the stock.



BIL has a significant Malaysian financial backer, Quek Leng Chan, who owns a 22% stake in BIL through his Camerlin investment company.


Thistle shares raced up 8% to 108p ahead of BIL's confirmation. An offer of around 110p would value Thistle at 530m. BIL, whose president is New Zealand entrepreneur Sir Ron Brierley, floated Thistle for 170p in 1996.

Guardian

Singaporeans mull Thistle bid

Advisers deny putting hotelier in play on back of Osmond campaign

Richard Wray
Saturday February 22, 2003
The Guardian

Thistle Hotels found itself thrust into the limelight yesterday as the Singaporean finance firm that controls almost half the hotel group said it is considering a full bid.
BIL International, which is better known in the City under its old name of Brierley Investments, said that its board met on Wednesday to consider making an offer at "a modest premium" to Thistle's current share price.

Shares in the hotel group gained 7.5p yesterday to end the day at 107.5p, valuing the company at 518m. BIL owns 46% of Thistle which it brought to the London market in 1996 at 170p a share.

The Singaporean investment firm, controlled by Malaysian billionaire Quek Leng Chan, is believed to have become increasingly disillusioned with Thistle's poor share price performance and the failure of the company's management team, led by chief executive Ian Burke, to return cash to shareholders.

Shares in Thistle, which reports annual results on March 3, are currently trading well below the 200p-plus estimates that analysts have placed on its net asset value.

BIL has so far only made a very tentative informal approach to the Thistle board and admitted yesterday that it might not make a bid.

But the company's advisers last night denied that they were merely putting the company 'in play' after noting the interest in rival hotel group Six Continents, owner of the Holiday Inn brand.

Thistle has been the subject of abortive approaches in the recent past. Both Millennium & Copthorne and Orb Estates have been involved in potential deals with the Leeds-based company.

Jersey-based Orb Estates bought 31 regional and six London hotels from Thistle for 600m in March 2002. Orb then opened up communications with BIL through Mr Chan, its chairman and controlling shareholder who is also a non-executive director of Thistle.

Orb finally pulled out of talks with Thistle last month amid rumours that it had been unable to secure financial backing for a deal.

Separately Orb's offices were raided just before Christmas by the serious fraud office following allegations that funds had been stolen from a shell company called Izodia in which Orb holds a major stake.

The Singaporean government's investment arm is also a major shareholder in Thistle, with about 19% of the company.

It has a representative - Lau Wing Tat - on the board as a non-executive but is not, however, understood to be involved in the BIL approach.

As well as Mr Chan, BIL's managing director Arun Amarsi is also a non-executive director of Thistle.

Scotsman

Thistle Hotels shares soar 7.5% on rumours of investment giant's bid

IAIN DEY


SHARES in Thistle Hotels surged 7.5 per cent yesterday after Singapore investment firm BIL International revealed it could make a bid.

BIL, controlled by Malaysian tycoon Quek Leng Chan, said it was considering a swoop for the 54 per cent stake in Thistle it does not already won.

Any bid would be at a "modest premium" to Thistles closing share price of 98.5p on 18 February.

"However, there can be no assurances that any offer will be forthcoming," it said in a statement.

Shares in the group, which has 56 hotels across the UK including operations in Edinburgh, Glasgow, Inverness and five sites in Aberdeen, closed 7.5p up at 107.5p on the back of the news - valuing the group at about 518 million.

Thistle confirmed it had met with BIL, but insisted that no formal offer has been tabled to date.

It added: "A further announcement will be made in due course and, in the meantime, shareholders are advised to take no action."

Thistle, which was floated by BIL at 170p per share in 1996, has long been considered a takeover target.

The management has come under fire for poor performance and reluctance to return cash to investors after raising 598.6 million last April from a deal to sell, but retain management of, 37 hotels.

In January, Jersey-based investment group Orb Estates decided against a bid for Thistle after saying last November it was considering an offer at a modest share price premium.

Along with its sector rivals, Thistle has struggled with a slower-than-expected recovery in the global economy, which has hampered its efforts to win back customers after 11 September.

In January, Thistle said its results for 2002 would meet market expectations but added it was difficult to forecast the likely outcome for 2003.

Thistle is Londons largest hotel operator with 22 sites, which has left it heavily exposed to the post-11 September tourist downturn.

The sectors woes have sparked much broader speculation about mergers and acquisitions.

Times

February 22, 2003

Thistle may face takeover bid by main investor
By Dominic Walsh



THISTLE Hotels, Londons biggest hotelier, was back in the takeover spotlight yesterday after its biggest shareholder said it was considering bidding for the rest of the company.
BIL, the Singaporean investment company that owns 46 per cent of Thistle, confirmed that its board had met on Thursday to consider making an offer for the rest of the shares at a modest premium to the then share price of 98p.

Thistle, which said that it had yet to receive a formal approach, is expected to reject any such offer, pointing to its net asset value of about 220p a share and the 360 million of cash on its balance sheet after last years sale and leaseback of 37 hotels.

Any attempt by BIL to buy the rest of the shares could hinge on the Singaporean Government, which owns a 13.1 per cent stake and is thought likely to align itself with BIL. However, the independent directors of Thistle will be keen to make sure that other investors are not disadvantaged.

BILs move is seen as a sign of frustration at its inability to find a credible buyer for Thistle.

In 1998 the shares soared to 250p after an abortive bid by Guy Hands, then of Nomura International. At the end of last year, Orb Estates, the discredited property firm, said it was considering a bid but withdrew under pressure from the Takeover Panel.

The involvement of BIL, formerly Brierley Investments, dates back to 1991 when it triggered an ultimately successful bid for the company by lifting its stake above 29.9 per cent. Five years later it floated the business on the London Stock Exchange at 170p, retaining a 46 per cent stake.

One analyst said: This is clearly an attempt to buy Thistle on the cheap after BILs failure to unlock a way of selling out at a decent price. It is clear that Ian Burke (Thistles chief executive) knew absolutely nothing about this.

Thistles London properties include the Royal Horse-guards, the Thistle Tower and Cannizaro House in Wimbledon. It sold 37 of its 55 hotels, most of them in the regions, to Orb Estates in a 600 million sale and leaseback in March and is under pressure to return the cash to shareholders.

The sharp rise in the shares yesterday morning that prompted the Takeover Panel to force BIL to make a statement is expected to come under the scrutiny of the Financial Services Authority, the City regulator. Having touched 110p, the share price closed up 7p at 107p.

wow ainsoph - you have been busy!

Well so have I. I managed to did up all my paperwork since acquiring the shares and ignoring inflation overall I'm currently 28% down on my orginal investment.

So much for the long term!

Hi ..... just been looking up the history - My charts go back 5 years and shown that the FTSE250 has fallen around 25% since this time 5 years ago but if you take the peak in september 2000 the index has fallen maybe 45% ....

If you look over the last year the shares have easily outperformed the sector over the year - the month and the week. I appreciate this doesn't get you your money back but maybe that is about to happen ...... very soon



ains

Closed on a high for the day and the month @ 108/112p on heavyish t/o with a late 500K spt now showing



ains

With the Americans staying away and people not booking as they are uncertain about what's happing about Iraq - I wonder if the rise is going to be shortlived.

Possibly worth a punt if drops back down, and will reduce my % losses to a level which will not take as long to recover?

News at this time is not good from the tourist front but they have been offering special deals foe UK based 'tourists' and we are talking M+A based on assets worth more than double current price.


ains

Up to 11m of ringfenced funds have gone missing from the Thistle hotels acquired by Jersey-based investment group Orb........

.....Thistle Hotels is also pursuing Orb for an alleged 15m it is owed by the investment group after the hotels transaction. Separately Orb has defaulted on two loans, thought to total 10m, from Morgan Stanley. Orb did not return phone calls last night.

Full story;

http://www.telegraph.co.uk/money/main.jhtml?xml=%2Fmoney%2F2003%2F02%2F26%2Fcnorb26.xml

Yes .... I posted it on the IZO thread .... ORB clearly have problems but trust this can only effect THO in a good way - they have clauses in the sale agreement re reselling



ains

fyi - sky news

Pubs and hotels group Six Continents says it remains sure a demerger will be the best deal for its shareholders.

Its views were aired after a meeting with potential bidder Hugh Osmond on Tuesday night.


Mr Osmond was not prepared to put a bid proposal on the table, the firm said.

All he had suggested was the offer would include shares in his firm Capital Management and Investment and might include cash - "possibly of a significant amount".

CSFB's Ian Marcus Comments on European Hotel Industry (Update1)
By Linda Sander

London, Feb. 26 (Bloomberg) -- Ian Marcus, Credit Suisse First Boston's head of European real-estate investment banking, comments on hotel operators spinning off assets and the possible takeovers of companies such as Six Continents Plc and Thistle Hotels Plc.

Six Continents, which plans to spin off its InterContinental and Holiday Inn hotels and bar businesses, is fighting a takeover bid by U.K. entrepreneur Hugh Osmond.

Osmond plans to pursue the purchase, a spokesman said today. Osmond, through Capital Management & Investments Plc, wants to buy Six Continents before the company spins off its hotels.

Singapore-based BIL International Ltd., which owns 46 percent of Thistle and its 20 hotels, said last week it may offer to buy the rest of the company.

On the revival of interest in hotel takeovers:

``Sept. 11 created a huge downturn in hospitality values. The readjustment in values is bringing out the buyers.

``Singapore's Raffles Holdings Ltd. is active in acquiring. Some of the opportunity funds like Blackstone Group LP, which owns the Savoy Group of hotels, have already committed funds to the sector. A number of other financial investors are thought to be examining the sector. They have funds to invest. They have to think about how to put their money to work.

``The main problem for the private equity funds is how they exit from their hotel holdings. The business is very cyclical. They may have missed the opportunity to exit at a favorable stage of the cycle this time round and may have to wait until the next upturn before they maximize value for their investors.''

On moves by European hotel operators to raise money by selling their hotels:

``In the U.S., hotels are considered as real estate and if you're an operator you don't need to own the real estate.

``In Europe, operators have historically been emotionally attached to their real estate, and institutional investors haven't recognized that hotels are a distinct real-estate asset class that could be acquired.

``Now that's changing. Operators are starting to use their hotels to raise capital. Thistle has sold hotels. Hilton Hotels Plc has done sales and leasebacks of hotels.

``We could see more of these deals. Companies should consider selling assets if they think it will lead to enhanced value for shareholders.''

On whether more hotel companies in Europe will attract acquirers:

``A number of hotel companies are strongly asset-backed. They have a parcel of real estate from which shareholders aren't getting the full value, and the value of the assets could be greater than the market cap of the company. This brings the sector to the attention of potential acquirers and creates an opportunity to release more value for shareholders.''

Stakeholder in Thistle Hotels bid talks
James Rossiter, Evening Standard 28 February 2003

THISTLE Hotels has been locked in takeover talks this week with its largest investor. Any deal would be likely to value Thistle at about 500m.



Sources close to the negotiations said the two sides were talking, led by Thistle chief executive Ian Burke and Arun Amarsi, the secretive Chinese-Malay group managing director of BIL International, a Singapore-listed investment company that already owns 45.8% of Thistle.



Last week BIL issued a statement merely confirming that its own board had met 'to consider making an offer' for the remainder of Thistle 'at a modest premium' to the 98 1/2p at which Thistle shares were trading on 19 February.



Thistle has not yet confirmed whether any discussions between the two sides are actually taking place but news on progress is expected when Thistle reports full-year results on Monday.



Thistle shares are currently trading at around 111p, up from a year's low last month of 89p but considerably lower than their high last March of 151p. BIL floated the

Hmmmmmmmm ...... it's a weird market ...... currently the cap is only 540 million and they currently have 340 million cash in the bank (70.5p per share)

Cannot see a bid of 110/125p succeeding


ains




March 02, 2003

600m offer for Thistle set to divide board
John Waples S Times



NON-EXECUTIVE directors at Thistle Hotels have been seeking legal advice ahead of a 600m offer from the groups majority investor Brierley Investment.
An offer could be made as early as tomorrow when Thistle reports results. But non-executive directors Baroness OCathain, Charles Mackay and Arthur Hayes are said to be concerned that the offer will undervalue the company.

Brierley, which owns 46% of the company, is ultimately owned by the Malaysian tycoon Quek Leng Chan who is also a board director. Brierleys hand has also been strengthened because it has the support of the government of Singapore, which has 13% of the company.

One analyst said the bid would become a test case for corporate governance. He added: The big question is whether David Newbigging, the groups chairman, will be railroaded into accepting an offer that clearly undervalues the company.

Brierley is being advised by HSBC and has indicated to the Thistle board that it will pitch an offer between 110p and 125p. This compares with analyst valuations that indicate the group could be worth between 180p and 220p. On Friday the shares closed at 112p. Thistle, which runs 55 hotels, is sitting on a 340m cash pile, and it is understood Brierley has made it difficult for Thistles chief executive, Ian Burke, to spend this capital or return it to shareholders.

The cash was raised through selling a portfolio of 36 provincial hotels to Orb Estates, a private property company. The hotels were then securitised for 600m. But this deal has run into problems and Orb is now being investigated by the Serious Fraud Office.

Morgan Stanley, the investment bank which arranged the securitisation, is now trying to find a new buyer to take over the portfolio and is in detailed talks with Leo Noe, a private property entrepreneur.

There is also tension between Burke and Arun Amarsi, an accountant put on to the board by Quek. Last month Amarsi put forward a plan called Project Oak, which proposed dencentralising the head office and cutting out excessive costs.

It is also understood Burke had proposed to replace Merrill Lynch with Cazenove but this idea was rejected by Quek. In its results tomorrow, Thistle will admit that because of Orbs financial position it can no longer treat a 45m loan as a credit in its accounts and instead the loan will be accounted for as a debt.

Analysts say a number of rival offers have been made to the company at prices above 160p per share but they have been rejected by Brierley.

They say Brierley is trying to buy Thistle on the cheap and will effectively gain control of a portfolio of 16 London hotels for only 140m.

Savoy Group, owner of the Savoy, Claridges and the Connaught, has put the for sale sign over The Lygon Arms, its up-market Worcestershire hotel.

The company has appointed Deutsche Bank and Jones Laing LaSalle to find a buyer for the 69-room property.

However, the sources denied industry rumours that the Savoy itself was being put up for sale.

PRELIMINARY ANNOUNCEMENT OF AUDITED RESULTS

FOR THE 52 WEEKS ENDED 29 DECEMBER 2002


HIGHLIGHTS

* Disposal of 37 hotel businesses for #598.6 including #45 million of
deferred consideration - at approximately book value.

* Second half turnover in owned or leased hotels ahead 1.9% against
second half 2001.

* Free cash flow #22.9 million comparable with prior year.

* Final dividend maintained at 3.4p per share.

* Cost reduction initiatives continuing in response to market
conditions.

* Cash balances at year end #367 million.





Commenting on the results, Chief Executive Officer, Ian Burke said:



"Revenue for the first eight weeks of the current year in our 18 owned or leased
hotels is 1% ahead of the comparable period in 2002. Our policy has been, and
will continue to be, to contain costs and to generate and conserve cash in what
we anticipate will be an uncertain economic climate in the months ahead."



David Newbigging, Chairman, said "Following discussion with the two largest
shareholders, who between them control approximately 66% of the Company, the
Board decided to retain the surplus cash in the Company for the time being.
However, depending on the outcome of the announcement made by BIL International
Limited on 21 February 2003 regarding a possible offer for Thistle, this policy
will be reviewed to seek to ensure that full value for this cash is obtained by
all shareholders."

03/03 07:13
Thistle Hotels Full-Year Profit Falls 42% on Slump in Travel
By Paul Jarvis


London, March 3 (Bloomberg) -- Thistle Hotels Plc, the U.K. hotels operator whose biggest investor is considering buying the rest of the London-based company, said full-year profit declined 42 percent following a slump in international business travel.

Net income for the year ended Dec. 29 fell to 21.8 million pounds ($34.3 million), or 4.5p a share, from 37.4 million pounds, or 7.7p, a year earlier, Thistle said in a Regulatory News Service statement. The annual dividend is unchanged at 5.1p a share.

Thistle and rivals with luxury rooms in city centers have suffered more than cheaper hotels as sluggish economic growth deterred corporate and long-haul travel. The company is 46 percent-owned by Singapore-based BIL International Ltd., which said last month it may make an offer for the rest of the shares.

``There has been no perceptible improvement in economic conditions worldwide during the early months of 2003,'' Thistle said in the statement. Revenue in Thistle's 18 owned or leased hotels rose 1 percent in the first eight weeks of the new year.

Heavy early morning volume and up 2.33%



Thistle on hold as it awaits Brierley
Jim Armitage, Evening Standard 3 March 2003

HISTLE Hotels was today stuck on full bid alert as it waited for a 600m offer from major shareholder Brierley Investment. Insiders had expected an offer could come as early as today, timed to correspond with Thistle's annual results statement, which revealed a sharp fall in profits and turnover.



Brierley, which owns 46% of the company, and the government of Singapore, owner of 13%, have stopped chief executive Ian Burke from returning its 367m cashpile to shareholders. The bidder is thought to be keen to keep hold of the cash as part of its deal, which is expected by some on the board to undervalue the shares if it comes in at the 110p level widely mooted. Burke today said he remained unable to offer any share buybacks or other ways of returning the cash to shareholders until the Brierley situation was resolved.


Pre-tax profits in the year to 29 December were 27.9m against 49.1m a year earlier on sales of 190m against 305.3m last time. The steep decline reflected the loss of income from 37 London and regional hotels sold last year to privately owned Orb Estates - a deal now the subject of litigation between the two sides. The downturn in tourism due to global terrorism and the threat of war in Iraq also had a heavy impact. The final dividend* is pegged at last year's level of 3.4p.




2003 Associated Newspapers Ltd.

LONDON (AFX) - Thistle Hotels PLC said there has been no perceptible improvement in economic conditions worldwide during the early months of 2003, as it announced a fall in profit before tax and exceptionals, reflecting the challenging trading environment and the loss of profits from the disposal of 37 hotel businesses during the year.
Pretax profit before exceptionals dropped back to 30.9 mln stg, from 45.5 mln stg and adjusted EPS, excluding the exceptional profit on sale of fixed assets and loss on disposal of businesses, was 5.2 pence, compared with 7.0 pence last year.

Analysts had been expecting the hotelier to report profits before tax and exceptionals of 27.5-34.9 mln stg.

Its final dividend has been maintained at 3.4 pence per share.

Thistle said it is continuing its cost reduction initiatives in response to the poor market conditions, having disposed of 37 hotel businesses for 598.6 mln stg during the year.

Second half turnover in owned or leased hotels was up 1.9 pct compared with the same period of the previous year.

"Revenue for the first eight weeks of the current year in our 18 owned or leased hotels is 1 pct ahead of the comparable period in 2002. Our policy has been, and will continue to be, to contain costs and to generate and conserve cash in what we anticipate will be an uncertain economic climate in the months ahead," chief executive Ian Burke said.

Thistle added that it has decided to retain its surplus cash for the time being and its net cash position on Dec 29 was 107.7 mln stg. But depending on the outcome of BIL's possible offer for the group, this policy will be reviewed to ensure full value for this cash is obtained by all shareholders.

etain.lavelle@afxnews.com