INDIA BUSINESS WORLD - APRIL 2007
The Month that was ...

INDIAN HOTELS IN $60M BUYOUT OF AMERICAN CAMPTON PLACE

Indian Hotels, a Tata group company, has informed the BSE that it has approved the proposal to acquire, through its 100% subsidiary company; San Francisco based Hotel Campton Place for $60 million (including estimated transaction costs). The hotel is intended to be acquired in partnership with financial investors, company officials said. While the sale-purchase agreement has been signed on April 2, 2007, the transaction closure is scheduled for April 30, 2007. The share price of Indian Hotels closed marginally lower by 0.7% on BSE on Tuesday.

West coast based Hotel Campton Place is a 14 storey, 110 room luxury boutique hotel situated in Union Square in San Francisco. Renamed Campton Place Hotel in 1983, the hotel occupies two historic and picturesque buildings dating back to the early 1900s.

Taj has been looking at significant acquisitions in the US more specifically at a west coast property, with the aim of building the brand in the US as traffic from there accounts for a sizeable chunk of its revenues. This would be the third acquisition for Indian Hotels in the US. In 2005, Taj acquired Pierre Hotel in New York from Four Seasons. Last year it unveiled its $170 million buyout of the Ritz Carlton hotel in Boston. Their other signature asset overseas includes St James Court in London and is also reportedly keen on acquisitions in Cape Town and Durban in preparation of the FIFA World Cup 2010.

The Rs 1,127-crore hospitality chain, with R Krishnakumar at its helm, is also looking at takeovers in other markets, especially in some prominent gateways in South-East Asia, sources added. The Taj Group established nearly 100 years ago, runs 59 hotels in 40 locations across India with an additional 16 international hotels. The hospitality major's international focus has been in shoring up its luxury segment, which now contributes as much as 75-80% of its revenue. With travel on the rise and the addition of new rooms lagging, the global hotel industry is witnessing hectic M&A activity with investor interest ruling high, sources said.

Meanwhile, Indian Hotels has informed BSE that Tejendra Khanna has resigned from the company board, with immediate effect.