LONDON Compass Group Plc has agreed to sell its Le Meridien hotel chain to Nomura s Principal Finance Group for $2.7 billion, completing its seven-month long hotel asset auction.
Compass has raised a total of #3.26 billion, or $4.59 billion from its hotel sales, which will be used to fund small acquisitions to strengthen its core foodservices business.
The final price for Le Meridien comes in a little higher than the #1.85 billion, or $2.6 billion initially assumed that Nomura would pay for the 150-unit chain. Nomura says Le Meridien will be merged with its Principal Hotels group, acquired in February.
Nomura is financing the deal with a mixture of equity and debt, with the bulk of the finance coming from a #1.5 billion, or $2.11 billion sale and leaseback deal with Royal Bank of Scotland involving 12 Meridien properties.
Completion of the Meridien deal is expected to take place in approximately six weeks and is conditional on regulatory consent. (5/25/01)
SOURCE:Reuters