The locations of Belmond's 44 properties operating in 22 countries are shown in the map on the preceding page. Belmond currently owns, partially-owns and/or operates 44 properties (with two additional businesses scheduled for future openings, the Belmond Cadogan Hotel in London, England and the Belmond Grand Hibernian train to be based in Dublin, Ireland), consisting of 34 highly individual deluxe hotels, one stand-alone restaurant, six tourist trains and three river/canal cruise businesses. This portfolio includes one long-term leased hotel in Bali, Indonesia where the owner dispossessed Belmond from operation of the hotel in November 2013 (see Item 3-Legal Proceedings). The Company’s predecessor began acquiring hotels in 1976 and organized the Company in 1994. The Belmond transaction is expected to complete in the first half of 2019.Belmond is a leading luxury hotel company and sophisticated adventure travel operator with exposure to both mature and emerging national economies. In 2016, LVMH also bought high-tech German suitcase maker Rimowa, which is headed by Mr Arnault’s son, Alexandre Arnault. “Given the current market, fewer and fewer assets are looking attractive to us. “We’re not actively looking at external acquisitions, we’re focusing on internal growth,” said Mr Arnault in April 2017. The last substantial deal by LVMH chairman and chief executive Bernard Arnault was more than 18 months ago, when his family company Groupe Arnault paid €12.1bn for the minority stake that it did not already own in Christian Dior.Īt the time Mr Arnault told the Financial Times that LVMH was shunning external acquisitions because they were either unavailable or too expensive. Its average price per room night ranges from $1,206 in Europe to $448 in Asia. In the year to September, Belmond made adjusted earnings before interest, tax, depreciation and amortisation of $140m on revenues of $572m. Including debt, Belmond is being valued at $3.2bn. That represents a value of $2.6bn for the overall equity of group. Paris-based LVMH said on Friday that it was buying Belmond for $25 per share in cash - a premium of more than $7 per share to the stock’s closing price on Thursday. SEE ALSO : EXCLUSIVE INTERVIEW : What UHNW want? The epitome of luxury is experience “While these activities have a limited impact on LVMH’s overall profit, these have been among the group’s fastest growing businesses over the past few years.” The global luxury hotel market was worth at $83.1bn in 2017 and is expected to grow at a compound annual growth rate of 4.3 per cent to reach $115.8bn by 2025, according to Grand View Research, a consulting firm. “Over the past decade, LVMH has expanded its reach beyond its traditionally boundaries with continued expansion of travel retail, the rollout of high-end hotels and spas,” he said. “Bernard Arnault was one of the first to think hard about how best to attract and retain an increasingly volatile luxury customer,” said Thomas Chauvet, analyst at Citi. He added that the deal will “bring us ever closer to our highly discerning customers”. “Our agreement today with the Belmond Group is entirely consistent with our continued investment in the field of experiential luxury,” Bernard Arnault told the Financial Times. The acquisition of Belmond comes as companies seek to tap into a rising trend of so-called “experiential” luxury, with consumers buying fewer products and more experiences in areas such as high-end food and wine, luxury hotels and travel. LVMH, which owns brands such as Christian Dior and Louis Vuitton, saw off interest from several other potential bidders for the deal, including private equity groups.īelmond, which used to be known as Orient-Express Hotels, had said in August it had hired Goldman Sachs and JPMorgan Chase for a strategic review. It also owns train services such as the Venice Simplon-Orient-Express and Belmond Royal Scotsman, and cruises including Belmond Afloat in France and Belmond Road to Mandalay. The acquisition of Belmond boosts the hotel portfolio of LVMH, which already has Cheval Blanc hotels in Courchevel, the Maldives, Saint-Barthélemy and Paris as well as owning Bulgari Hotel and Resorts.īelmond operates in 24 countries and its hotels include the Copacabana Palace in Rio de Janeiro and Hotel Splendido in Portofino. SEE ALSO : The threat hanging over Asia’s tourism The London-based owner of the Hotel Cipriani in Venice and the Orient Express train service is being acquired by LVMH for $3.2bn including debt, marking a return to dealmaking by the world’s largest luxury group by revenues.
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