An American private equity fund has kicked off an £800 million auction of Village Hotels, one of the UK’s biggest mid-market chains.

Advisers to KSL Capital Partners have begun marketing Village - which has a busy gym, restaurant and hotel in Kingswells - by sharing “teaser” documents with interested parties, according to the Sunday Times.

Morgan Stanley, the investment bank, was selected last year by KSL, based in Denver, to explore options for Village is thought to be inviting offers in excess of £800million.

KSL bought the chain for £485million from De Vere Group in 2014. It then had 3,100 rooms across 25 sites. Village has grown to 33 hotels with more than 4,000 rooms.

Proceeds from the sale to KSL a decade ago were used to repay Lloyds Bank, which acquired De Vere in a deal where debts of £1.75billion were swapped for equity to save the hotels group from collapse.

KSL is understood to have decided to go ahead with the sale of Village after market soundings suggested appetite from real estate investors.

A City source said the business, which owns freehold properties, could attract interest from the likes of Blackstone, the US private equity giant, and Starwood Capital, based in Miami, which now owns De Vere.

Click here to read more in the Sunday Times.

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