MBI International, the Saudi-based real estate group, has bought the Scotsman Hotel Group in a £63m deal.
The move finally ends the misery of the three-strong chain which has been financial straits more or less since its eponymous property was launched in Edinburgh in 1999.
MBI is to add the Scotsman group to its existing 55-strong JJW Hotels & Resorts operation which is headquartered in Paris. It said it plans to add to the bedroom count at the Edinburgh property and expand its spa. The other two properties being acquired are 42 The Calls in Leeds and Hotel de la Tremoille in Paris.
\We are delighted by this acquisition which expands our operations in the UK and France and advances the group's focus on the development of our activities in the luxury sector,\ said MBI chairman and CEO Mohamed Bin Issa Al Jaber.
JJW's portfolio currently stretches across the segments, from budget to luxury. This latest deal may signal a more focused approach but the company has found the lure of opportunistic deals too great in the past. It was close to buying Choice Hotels Europe (now CHE) back in 2001, for example.
Alongside the new acquisitions, JJW has the Berner's Hotel in London which is currently undergoing a £32m renovation, the Grand Hotel in Vienna, which it bought in 2002 for around Eu100m, and the Balzac and De Vigny hotels in Paris which it bought in 2004 for Eu53.5m.
MBI has what it describes is a major (but undisclosed) investment in Prince Alwaleed's Kingdom Hotel Investments, a 17-strong chain of hotels worth around $2bn that is focused on the Middle East.
The 69-room Scotsman opened in the former headquarters of Edinburgh?s main daily newspaper, the Scotsman, after an investment of £90m. But the development costs of the project meant the company haemorrhaged cash despite making a profit at the operating level.
The arrival of Robert Breare as chairman in 2002 failed to turn around the business after a difficult start. Former chief executive Charles Vere Nichol and managing director Nicholas Crawley had been shown the door earlier that year as backers Botts & Co, who had a 75% stake, demanded action.
The last set of available accounts, for the year 2003, show that interest payments were £9.5m. Operating profit before depreciation and interest was £1.9m.
The challenge for JJW is turning a group of boutique hotels into a brand that can command a premium price sufficient to compensate for the uneconomic size of the properties.
It has to build an infrastructure that can deliver guests, particularly business travellers, in sufficient volume to make up for the higher overhead of a group.
The scale of JJW means that its own executive team will at least not be such a relative burden for the business.