By Craig Karmin 

French luxury-goods company LVMH Moët Hennessy Louis Vuitton SE said Friday it has agreed to acquire Belmond Ltd., a London-based owner and operator of high-end hotels around the world.

LVMH agreed to pay $25 a share in cash for Belmond, a transaction that values the company's equity at around $2.6 billion. That represents a premium of more than $7 to where Belmond shares closed Thursday on the New York Stock Exchange.

Belmond's enterprise value, including debt, is about $3.2 billion.

The Paris-based luxury-goods company, which owns fashion brands like Fendi and Louis Vuitton and champagne maker Dom Pérignon, is a surprise winner in a highly competitive sale 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.

The French company's shares closed at EUR255.85, up EUR1.50, or 0.6%, on Thursday in Paris.

The deal is 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.

The deal also gives LVMH a bigger presence in "experiential luxury" to win over younger consumers. These clients are less likely to buy high-end goods, such as a Swiss watch, and more interested in luxury experiences, such as a stay in a fancy hotel.

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, the acquisition of Belmond will expand its reach in the luxury world and greatly increase its position in the hospitality business. The luxury-goods company has the Bulgari hotel brand and Cheval Blanc, a collection of luxury properties.

--Matthew Dalton in Paris contributed to this article.

Write to Craig Karmin at craig.karmin@wsj.com

 

(END) Dow Jones Newswires

December 14, 2018 06:07 ET (11:07 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
Belmond Ltd. (NYSE:BEL)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Belmond Ltd. Charts.
Belmond Ltd. (NYSE:BEL)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Belmond Ltd. Charts.