IHG Receives Binding Offer for InterContinental Paris
Thursday August 7th, 2014 - 9:59AM B
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PARIS—InterContinental Hotels Group PLC has received a binding offer from Constellation Hotels Holding Limited to acquire InterContinental Paris - Le Grand.
The proposed purchase price is 330 million Euros or $442 million, payable in cash at completion of the deal. Constellation has also committed to invest an estimated 60 million pounds in future hotel renovations.
The terms of the offer are such that IHG would retain a 30-year management contract on the 470-room hotel with three 10-year extension rights at IHG's discretion, giving an expected length contract of 60 years. Management fees are expected to be approximately $5 million per year.
In 2013, the InterContinental Paris - Le Grand generated revenues of $118 million and EBIT of $22 million, and as of June 30, it had a net book value of $342 million.
Tags: IHG • Constellation Hotels • Hospitality • Brands •
When you hear all the lodging industry projections for the months and years to come, much of the robust growth is forecast to be the result of the expected influx of travelers from China. In what could only be seen as good news for the industry, that expectation moved a little closer to reality when President Obama signed a visa waiver extension for Chinese travelers earlier this month.