IHG receives binding offer for InterContinental Paris – Le Grand for £262m

InterContinental Hotels Group (IHG) has received a binding offer from Constellation Hotels for its iconic InterContinental Paris – Le Grand. 

The proposed purchase price is 330m euros (£262m), with Constellation making a further commitment to invest over time an estimated 60m euros (£47m) in future renovations for the 470-room property.

Under the terms of the proposed deal, IHG would retain a 30 year management contract on the hotel, with three 10-year extension rights at IHG’s discretion, giving an expected length of 60 years.

Management fees are expected to be approximately 4m euros (£3.2m) per year. In 2013, the hotel generated revenues $118 (£70m) and EBIT of $22m (£13m).

Richard Solomons, chief executive officer of IHG, said: “The InterContinental Paris – Le Grand is an exceptional property and is an iconic hotel in our portfolio.

“This announcement demonstrates the continued successful implementation of our asset-light strategy and strength of our relationship with constellation, following its recent purchase of InterContinental London Park Lane and its majority investment in InterContinental New York Barclay.”