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.

Some of the hot money is exitting with their profits this AM - mm's ticking down



ains

BIL International Limited 6 March 2003

CASH OFFER BY HSBC

ON BEHALF OF BIL(UK) LIMITED

FOR THISTLE HOTELS PLC


ANALYSIS OF UNDERLYING VALUE


BIL notes the Thistle board's rejection of its Offer and its statements
regarding the underlying value of Thistle outlined in its announcement of 4
March 2003 titled 'Rejection of BIL International Limited's ('BIL') offer'.


BIL believes that the Offer represents an opportunity for Thistle
Shareholders to realise their investment in Thistle with certainty, at a
price of 115 pence per share, against a background of poor trading
performance in the UK hotel market and an uncertain outlook.


Thistle has compared the Offer Price to the three month and 12 month
average prices for Thistle Shares, based on the period up to 20 February
2003. BIL believes that this fails to address that Thistle's share price has
been supported by the bid speculation which has surrounded Thistle during
the past year including, inter alia, Thistle being in a formal offer period
from 4 November 2002 to 9 January 2003, as a result of certain announcements
by Orb. Following the ending of this offer period and the Thistle trading
statement of 16 January 2003, Thistle Shares fell to a 12 month low of 89
pence per share on 29 January 2003. The Offer represents a premium of
approximately 29.2 per cent. to this price.


Thistle's multiple of enterprise value to pro-forma EBITDA* for the year
to 29 December 2002 (as derived from the Offer Price) represents a premium
of approximately 35 per cent. to the average corresponding multiple of a
peer group of listed UK hotel companies (shown in Appendix 1),
notwithstanding that the peer group includes Six Continents which is itself
the subject of an offer.


The Offer Price of 115 pence represents a multiple of approximately 22.1
times Thistle's reported adjusted earnings per share from continuing
operations for the year ended 29 December 2002, compared to an average for
the peer group of 11.4 times. Using a pro-forma adjusted earnings per share*
for Thistle for the year ended 29 December 2002, a multiple of approximately
27.2 times is derived; a premium of approximately 138 per cent. to the peer
group.


Equally, the enterprise value of Thistle derived from the Offer Price
represents a multiple of 8.5 times Thistle's pro-forma EBITDA* for the year
to 29 December 2002, which exceeds the average corresponding multiple of 8.4
times derived from comparable recent transactions in the UK hotel sector
(shown in Appendix 1).


Thistle has compared the Offer to its net asset value ('NAV'). BIL
believes that NAV based valuation methods are appropriate for property
investment companies, but not for hotel companies.


BIL considers that an earnings based valuation approach is more
appropriate for hotel companies, as they are significantly different to
property investment companies in a number of ways, including:


- Capital expenditure - hotels generally require significant maintenance expenditure, the cost
of which is typically borne by the hotel owner, while property investment companies usually
pass these costs on to tenants.

- Income - unlike hotel companies, UK property investment companies tend to be characterised by
commercial leases with upward only rent reviews.

- Cost base - the cost base of a hotel company is typically significantly higher than that of a
property investment company.


In addition, Thistle's calculation of NAV fails to take account of the current
value of its long term debt or of its contingent capital gains tax.

Further detail of BIL's views on the underlying value of Thistle is set out in
Appendix 1.

Hmmmmmmm ..... clearly the market does not agree - ticked up


LONDON (AFX) - Singapore based BIL International Ltd has defended its 115 pence per share offer for Thistle Hotels PLC.
In a statement to the stock exchange, BIL, which saw its move for the hotel chain rebuffed, said the offer gave Thistle shareholders an opportunity to realise their investment in the group against a background of poor trading performance in the UK hotel market and an uncertain outlook.

BIL was responding to Thistle Hotel claims that the offer, which values the group at 555 mln stg, was opportunistic and failed to recognise the underlying value of the group.

In a statement to the London stock exchange today, BIL said Thistle's share price over the past year had been boosted by bid speculation.

It said the offer Price of 115 pence represents a multiple of about 22.1 times Thistle's reported adjusted earnings per share from continuing operations for the year ended Dec 29 2002, compared to an average for the peer group of 11.4 times.

Using a pro-forma adjusted earnings per share for Thistle for the year ended 29 December 2002, a multiple of about 27.2 times is derived; a premium of about 138 pct to the peer group.

Equally, the enterprise value of Thistle derived from the offer price represents a multiple of 8.5 times Thistle's pro-forma EBITDA for the year to Dec 29 2002.

This exceeds the average corresponding multiple of 8.4 times derived from comparable recent transactions in the UK hotel sector, it said.

It added Thistle's calculation of its NAV value fails to take account of the current value of its long term debt or of its contingent capital gains tax.

BIL said it considers that an earnings based valuation approach is more appropriate for hotel companies, as they are significantly different to property investment companies in a number of ways, including Capex, income and cost base.

rn

I must admit I don't think much of the offer. The hotel sector as a whole has not been too well since 11 Sept, and won't recover until after the US stops scaring people off taking trips for whatever reason. Long term the sector will recover and I think BIL is trying take the oportunity to get thistle on the cheap while they can.

Totally agree .... we are at bottom of the cycle - would rather wait for better times at the moment .... it's sily of them saying take our offer when the market is much higher


ains

Does anyone else hold these shares?

I've got some too. Originaly bought in at floatation but sold them for a small profit just prior to the Nomura interest a few years back. Then bought back in and still holding. Not one of my better investments but have had the divi's and return of capital since.

Do you have any thoughts on the offer?

Three blocks of 100,000 shares sold today at 121, 122 & 122 - someone selling short?

Seems unlikely - the trades may not be connected - may just be TTraders closing. The risk against reward seems very poor for a short. The bidder will have started incurring heavy expenses and unlikely to just walk away imho and may well be someone else interested. Plus the cash back situation and divi



ains

LW, my thoughts in two words:

it sucks!

Still ticking up on low volume 122/124p


ains

and again @ 123/124p on volume just over 200K

My guess is they will move their offer up ahead of the war



ains

Orb nears Thistle disposal
By Edward Simpkins (Filed: 09/03/2003) S Telegraph


Orb Estates, the Jersey-based investment company, is close to selling its portfolio of Thistle Hotels for 700m, a year after acquiring them for 600m.

Orb is believed to be in discussions with REIT Asset Management, the investment vehicle of the Noe family. REIT may be backed by Apollo Real Estate, a US-based equity house. The deal would involve the pair assuming 531m of debt and paying the remainder in cash for the 37 regional and six London hotels.

The deal would be welcomed by shareholders in Izodia, a failed software company turned cash shell, in which Orb is the largest shareholder.

Izodia has started legal proceedings against Orb to recover 33m of cash, its sole asset, which it claims was transferred to an associate of Orb.

Orb's offices have been raided by the Serious Fraud Office in connection with an inquiry into the whereabouts of the cash. Orb and its directors deny any wrongdoing.

The buyers are thought to be considering redeveloping the Kensington Palace, Kensington Park and Lancaster Gate hotels with the remainder likely to continue to be run by Thistle.

The 600m sale and leaseback between Orb and Thistle signed last March has since become fraught with difficulties. Orb is being sued by Thistle for refusing to pay 15m of the sale price while Orb is countersuing for 54m, the amount by which it claims the value of the hotels was overstated by Thistle.

Hmmmmmmmm ...... looks like we may get a real good result here ........



ains


March 09, 2003

Thistle plans 1bn auction
John Waples STimes



IAN BURKE, chief executive of Thistle Hotels, is to auction some of the groups flagship London hotels in a bid to defeat a 554 billion bid from its largest investor.
Burke is already in talks with advisers to put the Tower Thistle, worth more than 200m, up for sale. Other assets to be put on the market include the Royal Horseguards and Thistle Marble Arch. Analysts say the 18-strong owned or leased London portfolio could be worth between 800m and 1 billion.

Last week, BIL, an investment company controlled by Quek Leng Chan, a Malaysian tycoon, tabled an offer, valuing Thistle at 115p a share. This compares with a net asset value of 211p. The Thistle board, chaired by David Newbigging, immediately dismissed the offer as opportunistic and at a wholly inadequate premium. BIL controls 46% of Thistle.

Several of the hoteliers minority investors have also dismissed the approach. Tom Shrager of Tweedy Browne, the American value fund, which has just over 6%, said last week: We believe the present offer is outrageously low. It is pegged at half the asset value. Insight, which owns 4%, has also rejected the bid.

Burke is being advised by Merrill Lynch and, according to analysts, has held talks with several property consultancies over handling a potential sale. One option under discussion is to give all the proceeds back to shareholders. Thistle has only 260m of debt and has 340m of cash on its balance sheet after selling a portfolio of regional hotels to Orb Estates, a Jersey-based investor, for 600m.

Burke wanted to return this cash to investors, but his proposal was blocked by BIL. Thistle declined to comment, but it is thought that the group is now effectively open to all offers.

Four-star hotels are selling at between 180,000 and 300,000 a room. Thistles two biggest assets are the 801-bedroom Tower Thistle and Marble Arch, with 692 bedrooms.

Analysts say that, despite the weak hotel market, there are likely to be a number of buyers interested in its prime hotels. It is thought that parties who have registered their interest include the Barclay brothers, Strategic Capital and Blackstone, the American private-equity group.

The two BIL representatives on the Thistle board, Arun Amarsi and Chan, are no longer involved in the discussions. BIL is disappointed it has not secured the support of the government of Singapore, which controls 13% of the company.

Burke is also in the process of trying to find a new buyer to take over the regional hotel assets from Orb. Thistle has retained the management contract for these hotels. Orb is under investigation by the Serious Fraud Office and Thistle is having to write off 45m that was due from Orb.

Thistle has also started legal proceedings to recover an additional 15m. Orb has submitted a counter-claim, saying it had been misled by Thistle over the valuation of the hotels.

BIL blames Burke for tying up the deal with Orb. It believes the Thistle board has eroded shareholder value. BIL is also understood to be critical of Burkes management style.

Leo Noe, the property entrepreneur, has put a 600m offer on the table to buy the Orb portfolio. Noe is being backed by Gerald Ronson of Heron and by Apollo, an American opportunity fund. It is thought that Ronson may now look at Thistles entire portfolio.

Last week Thistle reported a 6.8% drop in sales in 2002. To boost sales, Burke said he was concentrating on the more resilient short-break market and on stripping out costs.

I think BIL have scored an own goal as they can no longer vote on the important issues and this must make it easier for the board to agree a money back to shareholders deal amongest many options




ains



03/09 11:16
Thistle to Sell Hotels to Fend Off BIL Bid, Sunday Times Says
By James Mosher


London, March 9 (Bloomberg) -- Thistle Hotels Plc plans to sell some its London hotels to raise as much as 1 billion pounds ($1.6 billion) as part of a strategy to defeat a hostile bid from its largest shareholder, BIL International Ltd., the Sunday Times newspaper reported, without identifying any sources.

Ian Burke, Thistle's chief executive officer, is already in talks with advisers about putting the Tower Thistle, worth more than 200 million pounds, up for sale, the newspaper said. Other hotels to be offered for sale include the Royal Horseguards and the Thistle Marble Arch, the Sunday Times said. The 18 London properties could be worth between 800 million and 1 billion pounds, the paper said, citing analysts.

Burke is being advised by Merrill Lynch & Co. and has held talks with several property consultancies over handling a potential sale, the Sunday Times said. An option being considered would have all proceeds from the sales going back to shareholders, the newspaper said. Thistle declined to comment to the Sunday Times.

BIL International, which owns 46 percent of Thistle, last week offered to buy the remainder of the company for 554.7 million pounds. Thistle rejected the bid, saying it was too low.

Things seem to be getting interesting. Hopefully they'll let us have some of the cash back sooner rather than later and not spend it all on advisers fees etc. which has taken substancial chunks of the cash. (I seem to remember on one occassion as much of 25% of the money they got went on fees! I remember thinking at the time what an outrageous amount!)

:-)) ...... They will find it hard to spend it all but take your point - advisors are expensive but in this instance I think we are making a real gain .... should be interesting this week. The paperwork has arrived but doubt I will read it as the offer is down the chute imho



ains




LONDON (AFX) - Thistle Hotels PLC is working on plans for a 500 mln stg sale of three top London hotels to thwart the 554 mln stg bid from Singapore-based BIL International Ltd, reported the Business without citing sources.
The report said Thistle would return the proceeds to shareholders as a special dividend, but it can only do that if a majority of shareholders approve the plan.

BIL already has a 46 pct stake, but The Business said other shareholders are sufficiently incensed that BIL's bid undervalues the company, they could outvote the bidder.

The three hotels identified for possible sale are the 801-bed Tower Hotel by Tower Bridge, the 280-bed four-star Royal Horseguards Hotel near the Houses of Parliament, and the 692-bed Marble Arch near Hyde Park and Oxford Street.

Thistle Hotels could not be reached for comment.

The Scotsman on Sunday

Thistle Hotels plans London sale to thwart unwelcome overseas advances

RICHARD NORTHEDGE


THISTLE Hotels is working on plans for a 500m sale of three top London hotels to thwart the expected 554m bid from Singapore-based BIL.

The Leeds group would return the proceeds to shareholders as a special dividend - but it can do that only if a majority of shareholders approve the plan and BIL starts with a 46% stake.

Thistle believes other shareholders are sufficiently incensed that BILs bid undervalues the company that it could muster sufficient support to out vote the bidder.

The investors are now mainly institutions, which are easier to contact and more likely to vote.

The three hotels identified for possible sale are the 801-bed Tower Hotel by Tower Bridge, the 280-bed four-star Royal Horseguards overlooking the Thames near the Houses of Parliament, and the 692-bed Marble Arch near Hyde Park and Oxford Street.

Together they account for half of Thistles assets: the 18 hotels that it owns, rather than manages, were valued in last weeks accounts at exactly 1bn.

It is understood that Thistle management have previously put forward plans for selling assets but have been blocked by the two BIL representatives on its board.

A buy-back of shares has also been mooted, but unless BIL agreed to sell shares, it would end up holding a larger proportion of the company and could bring BIL nearer to control.

BIL is offering 115p a share for the UK company, almost half its net asset figure of 211p.



Thistle reported a fall in pre-tax profits from 49m to 28m


BIL claims the assets are overvalued, but trying to sell them would establish their real value.

Thistle last week reported a fall in pre-tax profits from 49m to 28m and admitted that the room rate on its London hotels fell by 8.7%.

Many London hoteliers are reporting slack business and are having to offer special deals, but the Towers turnover fell by nearly 13% last year as competitors opened nearby.

The company owns 56 hotels in the UK, including 22 in the capital, making it the biggest hotelier in London. It has already reduced its portfolio from 100 after a previous downturn and now holds cash.

Last year it sold 37 hotels for 599m and ended the year with 367m cash.

The group was built by Scottish & Newcastle, the brewery outfit which bought several of the hotels - including the Tower - from EMI.

The brewer sold the chain in 1989 to the Mount Charlotte group, which was taken over in 1990 by BIL, then called Brierley Investments.

The Thistle name was applied to the whole chain and, when it was floated in 1996, BIL retained a 46% stake.

The Singapore government investment agency took a near-20% stake, however, and is opposed to BILs bid.

Thistle will need to time its sales plan well to thwart BIL. It must obtain shareholders approval before any acceptances take BILs stake above 50%.

Some investors will regard the scheme as a defence tactic by Thistle directors to force BIL to increase its offer.

Things are hotting up ....





March 10, 2003

Thistle plans sale to thwart predator
By Nic Hopkins



THISTLE HOTELS has begun seeking buyers of some of its landmark London hotels in an attempt to head off a hostile bid by Singapores BIL, its largest shareholder.
It is said to be seeking to raise as much as 600 million from the sale of six hotels, including the 280-room, five-star Royal Horseguards Hotel. The proceeds could be used to return as much cash to shareholders as the 115p-per-share BIL has offered for Thistle.

Other hotels said to be up for sale include the 800-room Tower Thistle, estimated at up to 200 million, and the Thistle Marble Arch. The sale would leave Thistle with a dozen smaller hotels with a net asset value of about 400 million. Last year Thistle closed a 600 million sale and leaseback deal with Orb Estates, an investment group in Jersey, covering 37 regional hotels.

But the cash-strapped Orb is tangled in a Serious Fraud Office investigation into the disappearance of funds at Izodia, a defunct dot-com shell. The company, which denies any wrongdoing, is said to have put its hotels back on the market for up to 700 million.

But the news that as much as 1 billion worth of hotels had been put on the market received a cool response from potential buyers yesterday. One observer noted that the industry has suffered from fears of a war in the Middle East and terror attacks on the capital. Thistle recently reported a 32 per cent fall in annual pre-tax profits before exceptionals to 30.9 million on turnover 38 per cent lower at 190 million. The source, who represents a potential buyer, said: Its true these are the jewels in Thistles crown, but the business is a mess. If they think they can sell them for 500 million, good luck to them.

Potential buyers of the London-based hotels reportedly include Farnsworth, the hotel consultancy and investor, and Rotch, the real estate group.