Hanover hotels deal in sight

HOTEL Group Hanover International is close to acquiring a big chain of properties through its Tweed Investments joint venture with Bank of Scotland.

The deal, which would double Hanover's size, comes at a time when serial investor Jack Petchey has taken his stake in Hanover to 7.96% through his private company, Trefick Investment.

Hanover, which also operates conference centres, joined forces with BoS last year to set up Tweed to invest in and manage hotels. However, a deal could be overshadowed by Petchey, who has shown an appetite for hotel companies in recent months, taking a 6.1% stake in Queens Moat Houses, and last week revealing a 4.6% holding in Jarvis Hotels.

He has targeted Hanover after it was the subject of a profits warning last month blamed on delays in integrating a new IT system and the extended closure of a Hampshire hotel damaged by fire.

Hanover's shares fell to 100p, but Petchey bought at 110p and last week they closed at 120p, valuing the company at £36m. Chairman Peter Eyles is expected to seek talks with Petchey in the next few weeks.