Le Meridien May Become Hotel Mgmt Company

LONDON— Guy Hands, the managing director of Nomura International’s Principal Finance Group, is planning to float Le Meridien as a hotel management company with the value of about $712 million, or £500 million. Hands is planning to sell the free holds of the various Le Meridien properties, which he purchased in May from Compass Group, and lease them back from investors while keeping control of the management company. It will then own the contracts to operate the chain of luxury hotels and would be free to bid for management contracts to run other hotel chains. The management company, which is expected to be called Le Meridien, will then be floated under plans being considered by Hands and his senior management, including Juergen Bartels, Le Meridien’s chief executive. The move will most likely be closely watched by other hotel groups that are considering similar plans as a way of improving their poor stock market ratings. SOURCE: Sunday Telegraph- London