A consortium of Saudi and UK family wealth funds have launched a $1.3bn bid for London’s Grosvenor House Hotel plus majority stakes in New York’s Plaza and Dream Downtown hotels from India’s Sahara India Pariwar group.
The offer could potentially spark a bidding war after Sahara revealed that it was also in talks with Qatari investors over a potential deal.
Current owner, Subrata Roy, founder of the Sahara conglomerate has spent nearly two years in jail over a case involving a convertible bond found illegal by Indian courts with Roy out on parole since May could spend time back in prison if he fails to pay $1.5bn for bail in August.
The UK family office, 3 Associates submitted the new all-equity offer on Tuesday 26 July 2016. It said most of the cash came from a Saudi family that runs a private wealth fund in Dubai.
They had been planning an offer but accelerated the bid after currency movements, in the wake of the UK’s June 23 vote to leave the EU, benefited dollar-linked investors, said Jesdev Saggar, managing director at 3 Associates.
Mr Saggar said the potential deal represented “one of the largest in the industry and a significant demonstration of confidence in London commercial property”.
Sahara owns all of the Grosvenor House plus 70% of the Plaza hotel on Fifth Avenue in New York — in which Saudi Prince Al-Waleed bin Talal owns a minority stake — and 85% of the Dream Downtown in New York’s Chelsea district.
The 110-year-old, 282-room Plaza, which has hosted celebrities such as The Beatles and Marilyn Monroe, is operated by Fairmont and was formerly owned by Donald Trump.
Sahara bought the 494-room Grosvenor House on Park Lane, operated by JW Marriott, from Royal Bank of Scotland in 2010 for £470m. The 1920s building is one of London’s best-known venues and hosts events including the Baftas.
Some $445.4m of debt owned by London’s Reuben brothers is secured against the hotels. Indian-born tycoons David and Simon Reuben took on the loans in 2015 after Bank of China, which previously owned the debt, called in administrators on Roy’s subsidiary, Sahara Grosvenor House Hospitality.
