Apollo is the frontrunner to buy a £1bn portfolio of Holiday Inn and Crowne Plaza hotels in one of the largest hotel transactions this year.
The private equity giant has edged ahead of Starwood Capital in the race to buy the assets, with a final decision expected next week.
A third bidder, London & Regional is no longer in the process.
The portfolio, which is being sold by LRG Acquisition – a consortium of Lehman, Realstar and GIC – comprises 19 Holiday Inns and three Crowne Plazas, totalling 5,943 rooms, with an annual turnover in excess of £200m.
Trophy hotels include the 906-bedroom Holiday Inn Kensington Forum, SW7; Holiday Inn London Bloomsbury, WC1; Holiday Inn Regents Park, W1; Holiday Inn London Mayfair, W1; and the Holiday Inn Heathrow, Middlesex.
The portfolio is a combination of both long-leasehold and freehold investments, with an average unexpired lease term of 50 years.
They have been bought under a franchise agreement. The original management deal with InterContinental Hotels Group expired at the end of last year, with Redefine Hotels appointed to manage the assets, but now a new buyer could replace it as operator.
LRG bought the hotels as part of a 73-asset portfolio from InterContinental Hotels Group in 2005 for £1bn.
The sale is the last in a process that began following the collapse of Lehman Brothers in 2008, which prompted it to dispose of 12 assets. LRG then had to carry out a debt restructuring during the downturn, after the £680m loan secured against the hotels matured in 2010.
It sold off 21 regional assets to Kew Green hotels for around £70m via Christie + Co in September last year.
In March this year it sold 18 regional assets to Cerberus Capital Management through Eastdil for £225m.
