Nomura International’s Principal Finance Group (PFG) has the lead in the race for the Le Méridien hotel chain after submitting a £1.85bn offer to catering company Compass Group, which is selling the hotels.
PFG’s headline offer tops that of US group Marriott International, which owns around 30,000 hotel rooms in Europe already. Marriott’s failure to come up trumps at this stage is surprising, as it was expected to bid more aggressively with a view to exploiting significant synergies once the purchase was completed.
If, as looks likely now, PFG is granted exclusivity for talks with Compass, it stands to dramatically raise its profile as a hotelier in Europe. Total capacity would be 33,100 rooms. The group, led by Guy Hands, recently bought the Cumberland Hotel in London and spent £255m on Principal, the UK chain.
As expected, both bids fell significantly short of indicative offers of between £2bn and £2.2bn. The bidders said that weak prospects for the US economy and the impact on business of foot-and-mouth in Britain would reduce Le Méridien’s earnings this year.
Nomura has lined up Jurgen Bartels to take charge of Le Méridien if its bid succeeds. Bartels used to be at the helm of Starwood Hotels in the US.