Alchemy drops asking price for Paramount Hotels group

Alchemy Partners, the venture capitalist that put its 16-strong Paramount Hotels group up for sale earlier this year, is understood to have dropped its asking price for the group.

Alchemy, which is being advised on the sale by Jones Lang LaSalle, is said to have lowered its price tag for the group to £225m from £250m after a disappointing response from the market.

The date for offers for the group closed last Friday. About 50 parties were understood to have shown an initial interest in the group, but many thought the asking price was too high.

Mark Wynne-Smith, managing director of Jones Lang LaSalle Hotels, refused to comment on the sale price, but said he had "received a number of interesting offers that we are working on".

Interest in the group of three-, four- and five-star hotels, which is not expected to be sold until next year, has come mainly from UK trade buyers and financial institutions.

Paramount was formed in 1994 by Michael Purtill, the former managing director of Principal Hotels.

Alchemy, which owns 90% of Paramount, became involved in the group in June 1998 after providing £27m of funding to buy the company from venture capitalist Advance Synergy for £77m.

A year later it provided an extra £14m to help the group make a £57m offer for Scottish Highland Hotels.

Source: Caterer & Hotelkeeper magazine, 27 November - 3 December 2003