Lloyds to sell its stake in George Hotel owner

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LLOYDS Banking Group is in talks to sell its non-core 30 per cent stake in hotel and conference centre chain Principal Hayley, whose venues include the George Hotel in Edinburgh.

In part of a wider deal, the suitor for Principal Hayley is understood to be United States property investor Starwood Capital, with a mooted price of £400 million.

Starwood Capital is a separate business to Starwood Hotels & Resorts, which owns chains such as Sheraton, including the Sheraton Grand Hotel in Edinburgh.

Lloyds, as well as being a leading shareholder in Principal, is also the main lender to the hotelier.

Lloyds chief executive Antonio Horta-Osorio has been selling off unwanted assets to further beef-up the capital cushions backing the bank’s lending.

A Lloyds spokesman declined to comment yesterday.

The remainder of Principal’s shares are owned by its management team, led by chief executive Tony Troy, and Roger Devlin, its chairman.

It is believed that, if the deal goes through, Starwood will appoint its own management team to run the business. The deal is expected to be completed in the next six weeks to two months.

Principal, which also owns London’s Hotel Russell, is one of several big hoteliers where Lloyds is a shareholder or lender.

Last year the bank sold the Mint hotels for about £600m.

Starwood Capital owns offices, hotels and retail centres in America and Europe.