KSL looking for Malmaison checkout?

The Denver-based private equity owner of UK boutique chains Hotel du Vin and Malmaison is reportedly looking for new investors to take on the businesses.

KSL Capital Partners acquired Malmaison Group for around £180m following the collapse of Richard Balfour Lynn’s MWB group in November 2012.
 
Now, there are City reports that advisers at investment bank UBS have begun sounding out prospective buyers again and offers for the chains are expected to be lodged by the first week of February 2015.

There are 29 Hotel du Vin and Malmaison properties in UK and executive chairman Gary Davis is widely credited with turning the numbers around, with sales and profit both growing since he stepped into the role in 2012.

Davis is also now chief executive of the Village hotels chain, which KSL acquired at the end of last year from De Vere Group for £485m.

De Vere Group chairman Andrew Coppel then described the figure achieved by the Village sale as “a reflection of the excellent quality of the brand, which has a strong and viable future and the potential to double its portfolio”. Some think KSL might prefer to invest in the Village brand, while selling off Malmaison and Hotel Du Vin.

Ex-Malmaison CEO Robert Cook may be one ‘player’ tempted to raise investment for Malmaison, although some regard the brand as a little ‘tired’ and in need of reinvigoration.

The likely short tenure of the properties with KSL is possibly the latest example of private equity buying cheap, turning the business around and then looking for a sharp exit.

Although Malmaison may have risen in perceived value with the markets, some City insiders believe Hotel Du Vin is the tastier target and remains a well regarded brand.

Asked about rumours of a proposed sale looming, Malmaison’s official line was that it was “not commenting” when reached by CN, adding that the two brands “have strong ambitions for growth and the management has big plans for growth in 2015”.
 
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Paul Colston

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Paul Colston

Managing Editor, Conference News & Conference & Meetings World.

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