Dubai co buys UK’s Travelodge

DUBAI: A state-owned Dubai investment firm said it had struck a $1.25-bn deal to buy the British hotel chain Travelodge as the oil-rich emirate looks to recycle its petrodollars.

Dubai International Capital (DIC) said it would pay £675m to buy the fast-growing hotel group from private equity fund Permira, the WAM news agency said.

The management of Travelodge, which also confirmed the deal in a statement on its website, will continue to run the business following the completion of the acquisition, expected by late September.

“This is a great day for Travelodge, our employees and all hotel customers as DIC’s investment will allow us to accelerate our low price revolution,” Travelodge chief executive Grant Hearn said in a statement.

Travelodge operates 291 hotels — 279 in Britain, nine in Ireland and three in Spain, mainly in city centres, the side of motorways or near airports. It aims to be the biggest budget hotel operator in London by the ’12 Olympics.

“The budget hotel sector is growing and, in our view, is underdeveloped in the UK market,” said Sameer Al Ansari, chief executive of Dubai International Capital. “Travelodge’s outstanding management team has an aggressive expansion plan which we are confident will give us an excellent return on this investment,” he added.

In May, it bought Britain’s Doncaster Group for $1.27bn. Other deals include the ’05 purchase of Tussauds Group, owner of the Madame Tussauds wax museums. for $1.5bn.

Dubai, which attracted more than 6m tourists last year, is also in the midst of a construction frenzy, with resorts, malls, sports installations and residential complexes sprouting up across its desert sands.