UK leisure firm pulls out of hotel auction

British leisure firm De Vere has pulled out of the bidding war for budget hotel chain Premier Lodge, it announced tonight.

De Vere dropped out of the £500m (€750m)-plus auction amid concerns over the cost of the acquisition.

The Warrington, Cheshire-based group announced in April that it had made a joint offer for Premier Lodge with investment group Sun Capital.

But chief executive Carl Leaver said tonight: “Our involvement in the auction process for Premier Lodge signifies the ambition of the company, whilst our determination not to overpay signifies our financial discipline.”

Others thought to be in the running include rival leisure firm Whitbread and private equity group Apax Partners.

De Vere used to own Premier Lodge but sold it to Scottish & Newcastle in 1999. It was then a much smaller operation with 69 sites.

Premier Lodge is now the UK’s third largest budget hotel brand, with 140 lodges nationwide.

A successful bid, which is likely to require in excess of £500m (€750m), would have made De Vere one of the largest hotel companies in the UK based on numbers of rooms.

In addition to its portfolio of hotels, De Vere runs 15 health and fitness clubs trading as Greens, 14 village leisure clubs and distillers G&J Greenall.

De Vere is currently the subject of attempts by a rebel shareholder group to force the sale of its UK hotels business.