7th Aug 2014 06:54
LONDON (Alliance News) - InterContinental Hotels Group PLC Thursday said it has received a binding offer from Constellation Hotels Holding Ltd to acquire IHG's InterContinental Paris Le Grand hotel for EUR330 million.
The owner of the Crowne Plaza and Holiday Inn chains said within the binding offer to acquire the 470-room Paris hotel, Constellation Hotels has made a further commitment to invest over time an estimated EUR60 million in renovations of the hotel.
IHG said that as at June 30, the hotel had a book value of EUR342 million.
Under the deal, IHG will retain a 30-year management contract for the hotel, with three 10-year extension rights, resulting in an expected contract length of 60 years.
IHG said the management fees are expected to be around EUR4 million per year.
In 2013, the hotel generated revenues of USD118 million, and earnings before interest and taxes of USD22 million.
Constellation Hotels previously acquire IHG's InterContinental London Park Lane hotel and it is a major investor in InterContinental New York Barclay.
"Following receipt of the offer, IHG has agreed to a period of exclusivity with Constellation, and, in line with applicable French legal requirements, IHG will enter into an information and consultation period with the relevant employees' representatives," said IHG in a statement.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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