Lone Star Eyes Quick Checkout From Jurys Inn

The American investor which took control of Jurys Inn in a £680m deal just five months ago has appointed advisers to consider options for its entire UK hotels portfolio.

Sky News understands that Dallas-based Lone Star Funds has asked bankers at Rothschild to conduct a strategic review of the assets with an eye on a possible exit next year.

Lone Star took control of Jurys Inn, which operates around 30 properties and around 7000 rooms, in January in a deal which ended UK taxpayers’ indirect exposure to the business.

The company had been partly owned by Royal Bank of Scotland (LSE: RBS.L - news) following a financial restructuring in 2013.

Like many property-backed businesses which saw their value decline sharply in the wake of the 2008 financial crisis, Jurys Inn was saddled with huge debts, which triggered a string of debt-for-equity swaps across the industry.

Lone Star also backs a company called The Hotel Collection, which owns prominent venues including The Lygon Arms in the Cotswolds.

A small number of the sites across both Jurys Inn and The Hotel Collection have been sold by Lone Star, and sources close to the firm insisted that there was no chance of an imminent transaction.

However, the speed of Rothschild's appointment, which followed a competitive pitch involving a number of other investment banks, has surprised industry observers.

It was unclear on Wednesday whether Lone Star would examine both an outright sale of the business and a possible stock market listing.

The beginning of its review comes at a busy time for hotel deals, with the Malmaison Group having been sold last week to a Singaporean investor for more than £300m.

Travelodge, the budget chain, is also preparing for a sale that could value it at £1bn following an improvement in trading.

A Lone Star spokesman declined to comment on Rothschild's appointment.