LONDON– The fate of Le Méridien will finally be decided this week. After months of speculation, a deal is expected to be signed as soon as tomorrow, Dec. 30, wherein Lehman Brothers and Starwood Hotels take over the troubled company and its hotel operations. According to the report, Lehman, working with Starwood, is preparing to exercise a pre-emption right to match an offer of almost £700 million, or $1.2 billion, made two weeks ago by Whitehall Street, the property investment arm of Goldman Sachs, one of its fiercest banking rivals. If, as is expected, a deal is signed this week, it would bring down the curtain on a year of mounting uncertainty for the Méridien chain. The proposed deal, which would effectively pay off the bulk of the £800 million of senior debt, would give Lehman the opportunity eventually to recoup some of the £200 million-plus, or more than $354 million, it has already invested in the business. If it had allowed Whitehall to buy it, it would have been forced to write off the entire amount. Lehmans decision to work with Starwood came after an unsuccessful attempt to work with Chicago-based Hyatt Hotels. And although Starwood owns the Sheraton and Westin chains, it is understood the Méridien brandwould be retained, with Starwood providing management expertise.
