Diageo to sell Scottish golf resort
Gleneagles – what a place for a corporate jolly. But soon no more. Diageo, the world’s number one drinks group, that is under pressure to lift sales and profits, is close to agreeing the sale of its luxury Gleneagles hotel and golf resort in Scotland, media reported on 26 June 2015.
The site, which was allegedly put up for auction earlier this year, could fetch anywhere between GBP 150 million and GBP 200 million (EUR 282 million), UK media reported. Its sale would relieve the burden on Diageo’s CEO Ivan Menezes, after a period of underperformance that has triggered rumours of a takeover.
Needless to say, Diageo declined to comment.
Gleneagles was built in 1924 by The Caledonian Railway Company. The hotel was nationalised along with the railway system in 1948. It was taken into private ownership in 1981, then bought by drinks firm Bells. Diageo has owned Gleneagles since the merger of Guinness and Grand Metropolitan in 1997. Diageo first tried to sell Gleneagles in 1998 but had to abort the process.
In 2014, Diageo received a dividend payment of GBP 41.8 million (EUR 58 million) – the first such payout for years – after turnover at the famous hotel, which has three golf courses and a restaurant with two Michelin stars, was up 12 percent to GBP 43.6 million in the financial year ending 30 June 2014, with profits rising from GBP 262,000 to 4.3 million, it was reported.
Diageo’s sales have been broadly flat for the past seven quarters and – until the recent takeover rumours – its share price had underperformed the FTSE 100.
Its shares jumped 8 percent in early June 2015 on rumours that 3G Capital, founded by the three Brazilian financiers behind brewer AB-InBev and Kraft Heinz, were considering a bid, valuing Diageo at over USD 70 billion.
However, the shares have fallen since 25 June 2015 after the U.S. news channel CNBC reported there was no truth in the speculation that 3G had an interest in Diageo, which also brews Guinness beer.
