Travelodge, the budget hotel chain, has been acquired by Madame Tussauds owner Dubai International Capital (DIC) for £675m.

DIC – the private equity arm of Prince Sheikh Mohammed bin Rashid al-Maktoum’s Dubai Holding – beat off bids from BC Partners, Starwood Capital and Cinven to buy the company from Permira, which acquired Travelodge for £712m in 2003 from Compass, the catering group in a deal that also included the Little Chef chain.

Sameer Al Ansari, chief executive officer of DIC, said: "We are delighted to have successfully acquired Travelodge. It is a strong brand with good growth potential and an excellent fit for DIC.

"The budget hotel sector is growing and, in our view, is underdeveloped in the UK market. "

Travelodge's management team will stay on at the company.

Leisure giant Whitbread dropped out of the bidding race. As the company already owns the Premier Travel Inn hotel chain, there were reportedly concerns of a competition investigation. Details: www.permira.com