Mandarin in final stages of Rafael takeover talks
Mandarin Oriental, the owner of London's Hyde Park hotel, is in talks to take over the Rafael Group.
Rafael operates six luxury hotels and resorts in Europe and the USA, including the Mark hotel in New York, Hotel du Rhône in Geneva, Hotel Rafael in Munich and the Turnberry Isle resort in Florida. Its properties have 1,223 rooms between them
Mandarin Oriental said Rafael fitted well into its criteria for expansion. Rafael's hotels have similar standards and are located in cities where Mandarin Oriental is not yet represented.
The two groups are at an advanced stage of negotiation, having signed a heads-of-agreement contract that gives Mandarin Oriental a period of exclusivity while it looks over Rafael's accounts.
Mandarin Oriental has luxury hotels in Bangkok, Hong Kong, Honolulu, Jakarta, Kuala Lumpur, London, Macau, San Francisco and Surabaya.
The organisation announced last week that its pre-tax profits were down by 11% to $43m (£27m). This drop was mainly the result of lower room rates in Hong Kong and the renovation of the Hyde Park hotel.
The London hotel has been closed for refurbishment since the end of November 1999 and is due to reopen in May.
Mandarin Oriental also said last week that it intended to raise about $150m (£94m) through an issue of ordinary shares and convertible bonds. The proceeds would be used for acquisitions and expansion.
A new 250-bedroom Mandarin Oriental in New York and another 325-bedroom property in Florida are in the process of being built.