IHG receives offer for Paris hotel
Intercontinental Hotels Group (IHG) confirmed on Thursday it received an offer from Constellation Hotels to buy Intercontinental Paris - Le Grand for €330m in cash.
Under the offer, IHG would retain a 30-year management contract on the hotel, with three 10-year extension rights at IHG's discretion. Management fees are expected to be about €4m per year.
The hotel, which overlooks the Opera House in Paris, has 470 guest rooms, including 70 suites.
It first opened in 1862 and has operated under the InterContinental brand since 1982. In 2013 the hotel generated revenues of $118m and earnings before interest and tax (EBIT) of $22m.
"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," said IHG chief executive Richard Solomons.
Constellation would also invest a further estimated €60m in future hotel renovations.