Intercontinental Hotels Group has announced it has received a “binding offer” from Constellation Hotels to acquire Intercontinental Paris – Le Grand.
The proposed purchase price is €330 million and Constellation has made a commitment to invest around €60 million in future hotel renovations.
The move is part of IHG’s plans to sell off some of its hotels in order to free up capital.
IHG would retain a 30-year management contract on the hotel, with three ten-year extension rights “at IHG’s discretion”, giving an expected contract length of 60 years. Management fees are expected to be approximately €4 million a year.
IHG chief executive Richard Solomons 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 the strength of our relationship with Constellation, following its recent purchase of Intercontinental London Park Lane and its majority investment in New York Barclay hotel.
“This potential transaction is yet another example of the enduring appeal of Intercontinental as one of the world’s leading luxury hotel brands.”
IHG has now entered into a period of exclusivity with Constellation and, in line with French legal requirements, will enter into a consultation period with the relevant employees’ representatives.
The hotel, which is located in the centre of Paris close to the Opera House, has 470 rooms, including 70 suites. It first opened it 1862 and has operated under the Intercontinental brand since 1982.
Last month, IHG confirmed it will terminate its contract at the Intercontinental London Westminster, which will now become a Hilton Conrad (see news, July 23).