LVMH springs a surprise as it lands Belmond at $3.2bn
LUXURY goods powerhouse LVMH has emerged as the surprise winner of the auction to buy Belmond, today agreeing a $3.2 billion (£2.5 billion) deal for the upmarket hotels and travel group.
The swoop will see Louis Vuitton’s parent LVMH operate the famous Venice Simplon-Orient-Express train, and own or manage 46 properties, including some of the world’s swankiest hotels.
Belmond’s trophies include Raymond Blanc-run Oxfordshire restaurant Belmond Le Manoir Aux Quat’Saisons and the Belmond Cipriani hotel in Venice where George Clooney got married.
Next year it will open its first hotel in the capital, a 54-bedroom property in Chelsea. In the UK it employs around 450 people. The suitor has agreed to pay $25 per share, a 40% premium on Thursday’s closing price, for the New York-listed firm, which is headquartered in London.
The deal comes around four months after Belmond hired Goldman Sachs and JPMorgan Chase & Co to conduct a strategic review of the business.
LVMH’s chairman Bernard Arnault said the acquisition would “significantly” increase his firm’s presence in the hospitality world.
The company has an existing hotels presence with the Bulgari and Cheval Blanc brands.
Analysts at Exane BNP Paribas said: “With this acquisition, LVMH strengthens its presence in the travel, luxury hotel and experience-related services.”
Paris-listed LVMH had not previously been linked with the purchase, and it fought off strong competition to buy Belmond, which used to be known as Orient-Express Hotels.
Other companies that circled included private-equity firms such as Blackstone and KSL Capital Partners. Hotelier Sir Rocco Forte had been eyeing some individual sites.
Belmond’s chairman Roland Hernandez added that there was interest from property companies and sovereign wealth funds. He said the transaction “provides compelling and certain value for our shareholders as well as an exciting path forward”.
The deal is expected to complete in the first half of 2019. It values Belmond’s equity at $2.6 billion, and the company, including debt, at $3.2 billion.