The former Dublin tax inspector who owns the Claridge’s and Connaught hotels in London has emerged as the favourite to buy Jurys Inns, as the auction of the hotel chain enters its final round.

Derek Quinlan, acting through his Quinlan Private investment vehicle, is believed to have made the highest bid of the four remaining parties in the auction with an offer worth an estimated €1.2 billion (£815 million).

The bid is thought to put Mr Quinlan at least €100 million ahead of Whitbread and Lydian Capital, an investment firm backed by John Magnier and JP McManus, the horse racing entrepreneurs. A fourth bidder, Permira’s Principal Hotels, is said to have dropped out of the running after its £358 million purchase of Hayley Conference Centres.

Analysts cautioned that the situation could change when the remaining parties file their final bids by today’s deadline for best offers. “As we enter the final furlong, there’s still everything to play for,” one City source said.

Jurys Inn has 20 three-star hotels, of which 14 are in Britain and six in Ireland, plus a pipeline of development sites. The business, which is about two thirds freehold, is thought to generate earnings before interest, tax, depreciation and amortisation of about €60 million.

The Jurys Inn chain was put up for sale in January through Merrill Lynch and Crownway by Dublin’s Jurys Doyle Hotel Group. Jurys Doyle, Ireland’s biggest hotel operator, was taken private less than two years ago by JDH Acquisitions, a consortium made up mainly of the Doyle family, in a €1.6 billion deal.

Jurys Doyle has told bidders that the Jurys Inn brand forms part of the sale, which would force the firm to drop Jurys from its own name. It is not clear what would happen if Whitbread won the auction, as the leisure group has indicated that it would convert the 20 hotels to its existing Premier Travel Inn brand.

Although it is lagging Quinlan Private in the bidding, Whitbread could finance a purchase of Jurys Inn from the sale of its David Lloyd Leisure (DLL) chain. It announced on Sunday that it had agreed a sale of DLL to London & Regional, owner of Next Generation Clubs, for £925 million.

Chris Rogers, Whitbread’s finance director, indicated yesterday that the sale of DLL could allow the company to return a further £450 million to shareholders “in the absence of any further value-creating opportunities”. He refused to comment on Jurys Inn. Simon Halabi, one of the underbidders in the DLL sale, has announced plans to invest £1 billion in expanding his Esporta health and fitness chain over the next three to five years. He also unveiled a new board, including Allan Fisher, the Holmes Place founder, as deputy chairman, and David Turner, formerly of LA Fitness, as chairman. The new chief executive is Glenn Timms, a former chief executive of Liberata, an outsourcing business.

Suite dreams for tax inspector

Quinlan Private, a private client advisory firm, has more than €9 billion of assets under management, including offices, retail properties, shopping centres, car parks and residential and commercial developments in Europe and North America

Recent deals have included:

— April 2007: £1.1 billion purchase of 47 UK Marriott hotels in partnership with Igal Ahouvi Group

— April 2006: Sells Four Seasons Milan for €200 million

— January 2005: Sells Savoy Hotel, London, for estimated £230 million

— April 2004: Leads £750 million purchase of Savoy Group, including Savoy Hotel, Claridge’s, Connaught and Berkeley, all in London

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