• Syndicates take aim at hotels

The flood of investor syndicates wanting a piece of the hotel pie continues with the latest transaction involving aAim, a group that includes such luminaries as football manager Sir Alex Ferguson, music mogul Simon Cowell and TV presenter Sir David Frost.
   The syndicate has swooped on the six hotel properties that are part of Principal Hotels, the group bought by private equity house Permira just four months ago for £300m from the Royal Bank of Scotland.
   The latest deal sees aAim pay £270m to buy the freeholds with a commitment to spend a further £20m on upgrading the hotels. Principal is to continue operating the properties, which have a total of 1,310 bedrooms and 80 meeting rooms with a capacity exceeding 7,000, on 25-year leases.
   Equity for the deal is coming out of aAim's Symmetry fund it set up in September with Bank of Scotland Corporate. The target IRR for this fund is 15%. HBoS is also providing debt.
   Since its launch at the start of 2003, aAim claims to have achieved an average return in excess of 80%. The latest deal takes its acquisitions through the £1bn barrier.
   Among the transactions was last October's buy of Menzies for £180m in a JV with R2O, the Robert Tchenguiz vehicle. HBoS was again the debt provider.
   The aAim team comprises group chairman Mark Taglieferri and hotels CEO James Elton, both ex Nomura. They previously worked together at Le Meridien prior to its collapse.
   The joint statement announcing the deal made much of the aAim team's experience of the hotel industry. Permira's partner Martin Clarke said: \Their detailed knowledge and understanding of the hotel sector was a significant factor in the timely completion of the sale and leaseback.\
   Tony Troy is to continue to head up the hotel operations of Principal. He led the original buyout of the group in 1994 and built up the chain to a 16-strong operation before selling it to Nomura in 2001. It was later that year merged with Le Meridien.
   Troy then leased back five hotels in 2004 from RBS and the latter eventually sold on the freeholds to Permira in September last year.
   At the time of its acquisition of Principal, Permira said it wanted to act as a consolidator in the fragmented four-star sector, a view now echoed by aAim's management.
   What is surprising is that the consolidation appears to be happening at the ownership, rather than operational, level.

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