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.

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

seems to me that some peeps are trying to talk this one down - ahead of a bid ....



03 Mar 2003 09:56 GMT

UPDATE 1-Thistle stabilises, but prospects bleak

(Adds CEO, analyst comments, detail, background, shares)
By Mark Potter

LONDON, March 3 (Reuters) - Thistle Hotels Plc, whose biggest shareholder is considering making a bid for the firm, said on Monday trading had stabilised but prospects remained bleak as fears of war and economic downturn deterred travellers.

London's largest hotelier said revenues at its 18 owned or leased hotels rose one percent in the first eight weeks of 2003 but were still well down on normal trading conditions.

Hotels across the world are suffering from a drop in tourism and business travel, sparking a flurry of speculation about potential mergers and acquisitions.

Analysts said there was some relief the news from Thistle was not worse following profit warnings from rivals Jarvis Hotels JVH.L and Macdonald Hotels MDH.L last week.

"But it's the prospect of a bid that's really supporting the shares," said Mark Reed, an industry analyst at stockbrokers Teather & Greenwood.

At 0930 GMT, Thistle shares were 3.6 percent higher at 116 pence, valuing the owner of The Royal Horseguards and Thistle Tower hotels at about 558 million pounds ($879 million).

Singapore investment firm BIL International BRY.SI said on February 21 it might make an offer of a little over 98.5 pence for the 54 percent of Thistle it does not already own.

Thistle Chief Executive Ian Burke declined to comment on the offer approach on Monday.


BID BATTLE?

The hotel chain also posted a declined in profit before tax and exceptional items to 30.9 million pounds in 2002 from 45.5 million in 2001, after it sold 37 hotels, although retaining management control of them, in a deal with Jersey-based investor Orb Estates last April.

Analyst forecasts had ranged between 27.5 million and 35.8 million.

Thistle also declared a full-year dividend of 5.1 pence, unchanged from 2001.

Speculation over mergers and acquisitions have rekindled interest in a sector that has been feeling the brunt of global security concerns and fears of a war in the Middle East.

Leisure entrepreneur Hugh Osmond on Monday launched a hostile 5.5 billion pound bid for Six Continents SXC.L , the owner of InterContinental, Holiday Inn and Crowne Plaza hotels.

Thistle has long been considered a takeover target, with management coming under pressure for poor performance and its reluctance to return cash to investors after raising 598.6 million pounds from the deal with Orb Estates.

Thistle, which used some of the money to pay down debts, said that after consulting with its two biggest shareholders -- BIL and the government of Singapore -- it had decided to retain the 367 million pounds of cash on its books for the time being.

CEO Burke said Thistle was coping with tough trading conditions by focusing on the more resilient short-breaks market and cutting costs and that it had outperformed its rivals in London since the middle of 2002.

Analysts said other hotel groups were unlikely to want to buy a London-based hotelier in the current environment but that property funds could be interested in Thistle because its shares are trading well below the value of its assets.

Teather & Greenwood's Reed said the firm's assets were worth at least 170 pence per share.

He trimmed his 2003 profit forecast to around 38.5 million pounds from 39.6 million but kept his "buy" investment rating on Thistle shares.

Thistle is stung by profit fall


THISTLE Hotels, owner of 56 hotels including one in Edinburgh, today reported a 22.4 per cent decline in full-year profits and said trading conditions remained difficult as it unveiled a one per cent rise in revenues for the first eight weeks of 2003.

For the 12 months to December 29, the group posted a pre-tax profit of 30.9 million, down from 45.5m for the previous year. Analysts had forecast profits of between 27.5m and 35.8m.

Thistle has suffered more than cheaper rivals as sluggish economic growth has deterred business travel. The company is 46 per cent owned by Singapore-based BIL International, which last month said it might make an offer for the rest of the shares.

Chief executive Ian Burke said: "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."

I must agree with you "that some peeps are trying to talk this one down". There has been so much bad press - quite a bit of it untrue, its does make me ask questions. Perhaps they are trying to make shareholders like myself (are there many of us left?) want to off load.

The "independant directors of Thistle" (all directors other than the ones who are also BIL directors) sent me a letter dated 25 Feb confirming that they had not received any formal approach and advising me not to take any action.

So what do you make of that?

I think that is the idea ....... to generate an impression that without their bid we will have a fall back to the lows with little short/medium term hope of seeing either a bid from elsewhere or a recovery. They clearly don't want to give the cash back as it will highlight the low bid value against assets.


I intend to stay with them at this time and expect the non exec directors to look after our interests. There are two other big investors who held around 13% between them at the beginning of the month.

We are up another 5% plus on heavy volume (4 times average) - we started the thread at 95p and now up to 118p mid giving plus 24% - some may well take profits.


ains