The two parties - Indian Hotels Company (IHC) and Millennium Partners which currently owns the Boston property - were in the headlines in August with news of the deal, but then things went quiet as discussion between the buy and sell sides continued.
IHC is part of IndiaÆs leading business group, the Tata group. The Tatas recently announced IndiaÆs largest ever M&A transaction and leveraged buyout, agreeing to acquire Corus UK for around $10 billion. IHC manages a chain of mostly luxury properties in India and abroad under the brand name ôTajö. It operates around 75 hotels and has a history dating back to 1903.
For IHC this acquisition is the latest in a series of moves to take the Taj brand global. In 2005 it entered into a long-term management contract to operate and manage the iconic hotel, The Pierre on 5th Avenue in Manhattan. Other international hotels in the chain include the Taj Exotica Resort & Spa in Mauritius and the Maldives, 51 Buckingham Gate in London and Woolloomooloo Bay in Sydney.
Millennium Partners is a real estate developer. It has created a portfolio of mixed-use properties including luxury hotels, condominiums, entertainment complexes, spas and office space. Millennium acquired the Ritz-Carlton in December 1999 from Host Marriott Corporation for $122 million. The hotel remained under the management of The Ritz-Carlton Hotel Company post deal - the acquisition was part of a series of partnerships between Millennium and The Ritz-Carlton Hotel Company. The 275-room property was refurbished in 2002 at an estimated cost of $50 million.
Taj Hotels will take over management of the property in January 2007 and will re-brand it The Taj, Boston. This marks the end of an era for the hotel, which was the oldest continuously operating Ritz-Carlton property in the United States.
Galileo Global Advisors, New York (who earlier advised IHC on the Pierre deal) were advisors to IHC. On a per room basis the price of $170 million translates to around $622,000 for the 275-room property, which analysts commented was a fair price for a luxury hotel in a location like the Ritz-Carlton enjoys.
IHC shareholders welcomed the news and the share gained a little over one percent in trading on Friday when the deal was announced to close at Rs150.45 ($3.38).
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