Jurys may get higher offers
By turning down the offer, Jurys board has done two things. It set a marker for any other bids that may be out in the market, and/or it will force Precinct to up its offer.
“In our view, this could lead to a higher bid being made by Precinct Investments or it may act as a base valuation to other consortiums that could be interested in making a separate bid for the group,” Goodbody said.
In the meantime the bid speculation will keep the share price at or close to current levels until clarity emerges over the hotel chain’s future.
In the short-term, the brokers expect the shares will be underpinned by the takeover speculation.
If the bid peters out, the shares are likely to ease back “but we would not expect it to reach pre-approach levels,” Goodbody said.
Other analysts have speculated the €15.25 bid was a reasonable offer.
Jurys has disappointed in the terms of its own proposed redevelopment plans and in the past it has not been good at meeting projected expectations for earnings.
It is generally accepted that the Dublin market has peaked in terms of occupancy levels.
Inevitably that means lower margins and some in-built softness in terms of future earnings.
Where Jurys Doyle goes from here is not that easy to judge right now, analysts suggested.
Initially after it announced it was examining its future strategy for the Ballsbridge site, it subsequently said it required more time to come up with a working solution.
Some analysts think the offer from Precinct at €15.25 wasn’t a bad price.
If no further bids emerge, the management will find it difficult to regain fresh momentum for the group, which has demarcation and other issues to deal with in its Dublin operations, including the thorny question of 12% service charge that goes to staff.
Jurys shares rose a further 5cent to €14.95 in Dublin yesterday.
Jurys has 30 hotels spread across Ireland, Britain and the US.
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