The largest hotel operator in the country — via its Maldron and Clayton brands — yesterday announced it had started exclusive discussions regarding the iconic hotel, which currently trades under the ‘DoubleTree by Hilton’ brand.
Private equity group Blackstone bought the former Burlington Hotel for €67m in 2012 before spending another €20m on its refurbishment. A price tag of between €140m and €180m has been linked to the upgraded premises.
At Dalata’s AGM in April, chief executive Pat McCann ruled out a bid on account of the perceived high asking price.
However, it was announced yesterday that this approach is in collaboration with a partner, which would purchase the property leaving Dalata to acquire the operating interests and leasehold.
A deal will likely take some time as further due diligence is yet to be carried out and a transaction would still probably need competition approval.
Dalata recently delayed its aggressive UK expansion plans until the real ramifications of June’s Brexit vote are known, but it is forging ahead with its growth in Dublin, where it is looking to add another 1,000 rooms by 2018.
It is eyeing a small number of new builds in Dublin and could buy some existing properties it operates by lease agreement.
Dalata currently has around 3,200 rooms in Dublin and derives 56% of its earnings from the capital. A successful deal for the Burlington would boost the group’s share of the Dublin market from 19% to 22%.
“The company continues to add capacity in markets that are experiencing high levels of growth and the addition of 500 rooms in Dublin would be a positive step,” said Davy Stockbroker analysts Robert Stokes and David Jennings in a joint research note.
Dalata’s share price was up 5.4% at €4.53 yesterday, but is still down by around 18% on the start of the year.
Elsewhere yesterday, FBD Hotels & Resorts announced construction on the €7m expansion of its Castle-knock Hotel and Country Club is to commence “imminently”.
The 21,280sq ft expansion will create an additional 46 rooms at the hotel, bringing its total to 190.
Building work is due to begin in November, with up to 100 construction jobs set to be created and a further 20 full-time positions coming on stream when the expanded hotel is up and running.
Earlier this year, the company — which operates properties in Ireland and Spain and which bought out FBD Holdings’ 50% stake in its interests last year — said it is targeting €50m in operating profits over the next four years.