By Sarah Townsend
ADIA already owns the five-star Lanesborough in London's Knightsbridge and bought more than 40 regional UK Marriott hotels
Abu Dhabi’s sovereign wealth fund has launched a $2.5 billion takeover bid for Maybourne Hotel Group, owner of luxury London hotels Claridge’s, the Berkeley and the Connaught.
According to a report in the Sunday Times, Abu Dhabi Investment Authority (ADIA) has sent a letter declaring interest in Maybourne’s holding company Coroin.
If the bid is successful, it would put an end to a four-year dispute over ownership of the five-star hotel portfolio.
In 2011, the billionaire Barclay brothers made an attempt to wrestle control of Maybourne from Irish property investor Paddy McKillen by unsuccessfully attempting to acquire around 64 percent of Coroin through a complex investment strategy that involved buying the holding companies that owned the shares in the business rather than the shares themselves.
McKillen launched several legal proceedings against the Barclay brothers in London and Dublin, some of which are still working their way through the courts. As it stands, McKillen owns 37 percent of Coroin, while fellow Irish investor Derek Quinlan holds a 35 percent stake. However, Quinlan has set up an arrangement with the Barclays whereby they control his voting rights on the board, in addition to the 28 percent stake held by a company they own named Misland.
A successful takeover of Maybourne by ADIA would also be the latest in a string of Gulf direct investments in prime London assets that totalled $3 billion last year, Arabian Business reported last week.
ADIA already owns the five-star Lanesborough in Knightsbridge and bought more than 40 regional Marriott hotels from Royal Bank of Scotland two years ago.
A source told the Sunday Times that the sovereign wealth fund has been circling Maybourne for some time.
“The price is reasonable,” the source said. “[The Abu Dhabi fund] is just trying to see where the land lies with the shareholders because there’s no love lost between the Barclays and McKillen. It has given everyone something to think about.”
The newspaper said ADIA is understood to be willing to settle for a majority stake in Maybourne, with McKillen retaining a minority interest.
McKillen’s spokesman reportedly said: “[McKillen] has no intention of selling his shareholding in Maybourne. He is, however, willing to engage with any potential new partner.”
Maybourne Hotel Group
declined to comment when contacted by Arabian Business.
This is not correct. The Barclays own just 28% of Coroin and Derek Quinlan owns 35%. There is a shareholders agreement in place where existing shareholders have the right to purchase shares or have first option to buy them once another shareholding is offered for sale. McKillen will buy Quinlan's shares once he attempts to sell them. The arrangement the Barclays have with Quinlan to control his his shareholding cannot continue forever and McKillen will be the majority shareholder once pre-emption is triggered. This is a core part of McKillen's ongoing legal action against the Barclays since they launched their hostile take-over attempt of the hotels over four years ago. They have not advanced their position since that time.
This is a very interesting development and as far as I am aware Sam's comments are correct.