Jun. 18, 2006 - Three potential bidders are circling the £800 million De Vere hotels group, owner of London's Cavendish Hotel and operator of The Belfry golf course, the West Midlands venue of the Ryder Cup.

Private equity group Permira has teamed up with Delancey, the property firm headed by Jamie Ritblat, son of British Land chairman Sir John Ritblat.

They face competition from Starwood Hotels, the American group which owns the Sheraton and Le Meridien brands. The identity of a third bidder is still secret.

None of the would-be bidders has yet made a firm offer, despite pressure from De Vere and its adviser, investment bank UBS, to push the sale forwards.

It is understood they are each waiting for a rival to bid first, to see at what level they pitch their offer.

De Vere, owner of 19 four and five-star hotels in Britain, revealed that it had received a takeover approach in March.

This was believed to have come from private equity firm Blackstone, which is thought to have offered 750p a share, though this was not confirmed. Blackstone has since withdrawn from the auction.

It has emerged that De Vere is holding out for an offer closer to 850p a share.

Strategic Hotels, owner of properties across America, and NH Hoteles, the Spanish group, were in the running, but both dropped out in recent weeks.

NH is thought to have withdrawn from the bidding after itself becoming a potential target.

Rival hotels group Hesperia, Spain's largest chain of business hotels, has been buying shares in NH and is now its largest shareholder, with a stake of 21.4 per cent.

De Vere has been the subject of takeover speculation for several years. In 2004, the investment firm Guinness Peat Group offered 415p a share, but the negotiations stalled.

Several investors stand to make a fortune if De Vere is sold, including Steve Morgan, founder of the Redrow property empire, and the Greenall family, which founded gin maker G&J in 1761.

By Lucinda Kemeny and Lauren Mills

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