Meridien Chain Close To New Ownership

[george]

Meridien chain close to new ownership

PHUKET: -- Plans are on the table for recapitalization of debt-ridden Le Meridien Hotels & Resorts, which operates four hotels in Southern Thailand.

Two of the hotels, Le Meridien Phuket Beach Resort and Le Meridien Khao Lak, are to reopen later this year after being severely damaged by the catastrophic events of December 26.

Le Royal Meridien Phuket Yacht Club at Nai Harn Beach suffered minimal damage and remained open while Le Meridien Baan Taling Ngam on Koh Samui was, consequently, busier than expected.

In a recent press release, Meridien headquarters in London announced that affiliates of investment bank Lehman Brothers, which holds much of Le Meridien’s debts, and Starwood Capital Group Global LLC intend to form a joint venture to acquire Meridien’s portfolio of 135 leased and owned hotels.

In addition, Starwood Hotels & Resorts Worldwide Inc (Starwood Hotels), which operates more than 750 pro perties worldwide, – both owned and managed – including the Sheraton Grande Laguna Phuket, has entered into a non-binding agreement to acquire and subsequently manage the Le Meridien chain from Lehman Brothers/Starwood Capital.

Realization of these these proposals still awaits a decision by the Meridien board, and through parallel discussions with – among others – stakeholders and employee representatives of the chain. If the deal goes through, the transactions and recapitalization are set to be completed in the third quarter of 2005.

Speaking to the Gazette today, Philippe Seigle, Regional General Manager of Le Meridien Thailand Resorts, said, “For the statement on the proposed recapitalization and acquisition to have been released, I would say that it is very likely that it will go ahead.”

Asked what changes this could mean for the four local resorts and whether the proposals – if accepted – could mean the end of the Meridien brand, he said, “On the contrary, Le Meridien will stay under the Le Meridien flag; it is, after all, a high-profile, well-respected and unique brand.

“Jobs will not be affected and the management teams will stay in place.”

When asked if any of Le Meridien hotels worldwide might be incorporated into the current range of Starwood Hotels brands, Mr Siegle said that it is anticipated that although the Meridien brand will remain, the management company will review its portfolio at a later date.

“In many ways the proposal is more like an MOU [memorandum of understanding], the ‘will’ to go for an agreement, and [the parties involved] are still finalizing the details.

“The agreement is ‘non-binding’ because no-one knows exactly what will happen in the future.”

He also said that Le Meridien Phuket Beach Resort and Le Meridien Khao Lak were on track to reopen in August and mid-October respectively.

--Phuket Gazette 2005-05-04