Thistle Hotels will refuse investment group Orb's proposed sale of 37 Thistle-managed properties to Newcastle entrepreneur Allan Rankin until its dispute with Orb is resolved.
Jersey-based Orb Estates announced it would sell its Thistle-managed hotels to Rankin, chief executive of Ultimate Leisure Group, last week.
Thistle is suing Orb for £14m outstanding from the £600m sale of the 37 properties last April. Orb, which disputes the claim, is also the subject of a serious fraud inquiry over other business dealings.
Orb has not disclosed the terms of the proposed sale, but Thistle confirmed it had not yet held any discussions with Rankin to discuss the deal.
"Any deal would very much depend on the structure of the negotiations," said a Thistle spokesman.
Should Rankin complete the deal, it is understood that he might convert several of the London properties into private residences.
Thistle has confirmed that a termination of any management contracts under new or current ownership would give it four times the full amount of the hotel's annual management fee in compensation.
Earlier this month Thistle Hotels rejected a £554.7m takeover bid from its biggest shareholder, Singapore investment firm BIL International, claiming the offer was "opportunistic" and "wholly inadequate".
Source: Caterer & Hotelkeeper magazine, 27 March - 2 April 2003