Mandarin Oriental acquires option to purchase the freehold interest in the building housing Mandarin Oriental, Paris (France)
|
|
Mandarin Oriental acquires option to purchase the freehold interest in the building housing Mandarin Oriental, Paris (France)
|
Category: Europe - France - Industry economy
- Group or hotel buyout
This is a press release selected by our editorial committee and published online for free on 2012-12-03
Mandarin Oriental International Limited, the publicly listed parent company of Mandarin Oriental Hotel Group (the ‘Group’) announced today that it has, pursuant to a preliminary sale agreement, acquired an option to purchase the freehold interest in the building housing Mandarin Oriental, Paris and two prime street front retail units (collectively, the ‘Property’) from Société Foncière Lyonnaise (‘SFL’) for €290 million (US$374 million). The Group has paid a €10 million (US$12.9 million) advance deposit to secure the option, and, if the option is exercised, the Group will be required to pay a further €280 million (US$361 million) to acquire the Property (the ‘Transaction’). The option will expire if the sale is not completed by 15th February 2013.
Mandarin Oriental currently has a 12-year lease on the hotel, which commenced on 18th April 2011 and which is renewable for a further 12 years, while the retail units are leased by SFL to third party tenants.
The Transaction is expected to be partly funded by new five-year €150 million (US$193 million) debt facilities, with the balance to be met from the Group’s cash reserves.
The Transaction requires the approval of shareholders, which must be obtained before 15th February 2013. A circular will be posted to shareholders in early 2013. Completion of the Transaction is expected to occur shortly after shareholders’ approval has been obtained. Jardine Strategic Holdings Limited, which holds a 73.7% direct interest in Mandarin Oriental International Limited, has given its undertaking to vote in favour of the Transaction.
Edouard Ettedgui, Group Chief Executive, said “We believe that the Transaction offers a rare opportunity to acquire a prime piece of real estate in a key gateway city which is an important destination for our luxury brand.”
The Property is located on the prestigious Rue St Honoré, within walking distance of the city’s famous cultural attractions and world class retail. The acquisition is expected to be earnings enhancing and to bring a number of additional benefits including single ownership and the opportunity for future expansion for the hotel.
The Property has a net lettable floor area of approximately 17,400 sq. m., and had rental income of €10.6 million (US$13.7 million) for the 12 months ended 31st October 2012.
The Group is the award-winning owner and operator of some of the world’s most prestigious hotels, resorts and residences. The Group now operates, or has under development, 45 hotels representing over 11,000 rooms in 28 countries, with 19 hotels in Asia, 13 in The Americas and 13 in Europe, Middle East and North Africa. In addition, the Group operates, or has under development, 14 Residences at Mandarin Oriental connected to its properties. Mandarin Oriental International Limited is incorporated in Bermuda and has a premium listing on the London Stock Exchange, with secondary listings in Bermuda and Singapore. It is a member of the Jardine Matheson Group.
|
|
