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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.

TagsFinance and Hotels
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