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IHG plans to sell InterContinental Paris – Le Grand for £262m

07 August 2014 by
IHG plans to sell InterContinental Paris – Le Grand for £262m

InterContinental Hotel Group (IHG) plans to sell its iconic InterContinental Paris - Le Grand hotel for 330m Euros (£262m).

The news came as Constellation Hotels Holding, which is ultimately backed by the Qatari sovereign wealth fund, made a binding offer for the 470-room property, which first opened in 1862 and has operated under the InterContinental brand since 1982.

Under the terms of the proposed deal, IHG would retain a 30-year management contract on the hotel with three 10-year extension rights at IHG's discretion, giving an expected contract length of 60 years. Management fees are expected to be 4m Euros (£3.2m). In 2013, the hotel generated revenues of $118m (£70m) and EBIT of $22m (£13m).

It would not be the first time IHG struck such a deal with Constellation. In 2013, it agreed to sell the InterContinental Park Lane for £301.5m, while Constellation paid another £100m to buy the freehold from the Crown Estate.

Richard Solomons, chief executive officer of IHG, said: "The InterContinental Paris - Le Grand is an exceptional property and is an iconic hotel in our portfolio. This announcement demonstrates the continued successful implementation of our asset-light strategy and the strength of our relationship with Constellation, following its recent purchase of InterContinental London Park Lane and its majority investment in InterContinental New York Barclay.

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