LVMH Close to Deal for Hotel Operator Belmond--Update
December 13 2018 - 7:39PM
Dow Jones News
By Craig Karmin
French luxury-goods company LVMH Moet Hennessy Louis Vuitton SE
is close to a deal to acquire Belmond Ltd., a London-based owner
and operator of high-end hotels around the world, according to
people familiar with the matter.
LVMH is near an agreement to pay $25 a share in cash for
Belmond, a transaction that would value the company's equity at
around $2.6 billion, these people said. That bid would represent a
more than $7 premium to where Belmond shares closed Thursday on the
New York Stock Exchange.
Belmond's enterprise value, including debt, would be about $3.2
billion, said people familiar with the offer.
The Paris-based luxury-goods company, which owns fashion brands
like Fendi and Louis Vuitton and champagne maker Dom Perignon,
would be a surprise winner in a highly competitive sales process.
For weeks, Middle Eastern and Asian government funds, big hotel
brands and private-equity firms have dominated the bidding, say
people familiar with the process.
But LVMH now looks poised to prevail, and announcement could
come as early as Friday, these people said. The French company's
shares closed at EUR255.85, up EUR1.50, or 0.59%, on Thursday in
Paris.
A Belmond sale would be the latest sign that luxury travel is
booming after an extended downturn, when many leisure travelers and
businesses shunned paying up for high-end accommodations.
The hospitality company has full or partial stakes in virtually
all of its 36 hotels, making it one of the last hotel operators to
own most of the properties its manages. The hotels include Cipriani
in Venice, the Grand Hotel Europe in St. Petersburg, Russia, and
the Copacabana in Rio de Janeiro.
After years of spurning all takeover offers, the Belmond board
announced in August that it had initiated a strategic review that
effectively put the company up for sale. Belmond's share price has
soared more than 50% since the announcement.
Founded as Orient-Express Hotels, the business became a
stand-alone company in 2000 and changed its name to Belmond in
2014. It also offers luxury train rides, including the Venice
Simplon-Orient-Express, river cruises in Europe and Asia, and owns
the venerable 21 Club restaurant in New York City.
For LVMH, an acquisition of Belmond would expand its reach in
the luxury world and greatly increase its position in the
hospitality business. The luxury-goods company owns the Bulgari
hotel brand and Chevel Blanc, a collection of luxury
properties.
Write to Craig Karmin at craig.karmin@wsj.com
(END) Dow Jones Newswires
December 13, 2018 19:24 ET (00:24 GMT)
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