Qatar adds Claridge's to hotel stable in deal with Barclay brothers
Qatar has added to its collection of luxury London hotels after buying Claridge's, The Berkeley and the Connaught from Sir David and Sir Frederick Barclay, whose exit from the businesses comes after four years of legal wrangles.
Richard Faber, a spokesman for the Barclay brothers, said an agreement had been reached to “ensure an end to any litigation” over the ownership of the hotels and that the business “has been a very successful investment for us”.
The selling price was not disclosed but there were rumours at the beginning of March that the Abu Dhabi Investment Authority had offered £1.6bn, valuing the hotels at £3m per room. One source close to the deal on Thursday said that figure “might be a bit toppy”.
Constellation Hotels, the buyer, is part of the Qatar Holding investment vehicle and has been steadily amassing some of Europe’s best-known hotels. In 2013, it bought the Intercontinental Park Lane for £400m. It has also bought the St Regis in Rome and Le Grand in Paris.
The three London properties were held by Coroin, an Irish company set up by Patrick McKillen and other investors including the financier Derek Quinlan to buy trophy hotels in 2004 financed by cheap and easy bank debt.
After the financial crisis, the debt underlying Mr Quinlan’s 34 per cent share was sold by the Irish National Asset Management Agency, the country’s “bad bank” to the Barclay brothers for an undisclosed sum. They also built up an equity share of about 30 per cent in Coroin, giving them overall control of the group.
Mr McKillen challenged the Barclays, who also own the Ritz hotel and the Telegraph Media Group, in court on the grounds that Mr Quinlan’s stake should have been offered to him first. But he lost in the High Court and the Court of Appeal. He lodged another case at the Irish High Court this year.
The deal with Constellation will see Mr McKillen stay on and manage the redevelopment of Claridge's and the Berkeley. “This is what he wanted all along before the Barclays came along four years ago,” said his spokesman. “I saw him earlier and he was looking pretty happy.”
Last March, the debts underlying Mr McKillen’s share of Coroin were sold to Colony Capital, a US investment fund for an undisclosed sum. Colony has a close relationship with Qatar, with which it co-owns the Fairmont Raffles Hotels and Miramax, the Hollywood film studio.
At the time, the Barclays had tried to buy out Mr McKillen’s debts to gain total control of the group but had been outbid by Colony, said one person close to the deal on Thursday.