Berkeley hotels

Claridge owner removes online admins over stake value

Claridge’s, one of Britain’s most luxurious hotels, faces a new tussle between its owners, seven years after a Qatari royal teamed up with an Irish property developer to gain control of its parent group .

Constellation Hotels, ultimately owned by Sheikh Hamad bin Jassim bin Jaber al-Thani, has pushed Patrick McKillen of the board of directors of Claridge’s parent company, Maybourne Hotels, as they dispute the value of a stake in the business that could be worth more than £1 billion to McKillen.

McKillen and his longtime associate Liam Cunningham were removed from the board without warning last weekend, according to two people with knowledge of the events.

Neither Cunningham nor McKillen, who has run and renovated the group’s hotels for the past seven years, were present at the meeting where the decision was made, both said.

Ownership disputes at Maybourne, which owns Claridge’s, Berkeley and Connaught hotels as well as locations in Los Angeles and the French Riviera, have been swirling ever since the Barclay brothers, who also own the Daily Telegraph, launched a takeover bid of Maybourne Coroin’s stake in 2011, prompting McKillen to fight back and launch what has become one of the UK’s most high-profile and expensive shareholder disputes of recent times.

The Qataris, through Constellation Hotels, came to support McKillen, one of Coroin’s original owners, ultimately allowing him to spurn the Barclays offer after four years of legal battles.

McKillen is set to receive a deferred payment after selling its 36% stake in the business as part of Constellation’s deal to buy Maybourne for £1.3billion in 2015, a deal that tied McKillen to the management of hotels until December this year. The value of the payment is to be decided this month.

According to a person familiar with the contract, McKillen is entitled to a payment equal to the value of the hotels, less the initial value of the deal of £1.3 billion and the value of Constellation’s capital investment to restore the hotels. .

Maybourne could be worth more than £5billion, given the recent upturn in the luxury hotel business as pandemic restrictions eased, and based on recent sale prices of similar assets, according to a person familiar with of the two former administrators.

A person close to Constellation said he would “honour his obligations”.

When Constellation removed McKillen from the board, it named Marc Socker, who worked in hotel real estate, and Gianluca Muzzi, a former Deutsche Bank executive, as new co-chief executives at Maybourne without his knowledge. by McKillen.

The Qataris are “notoriously tough partners,” a McKillen insider said. “Paddy is completely confused. He couldn’t have done a better job of expanding [and] renovation of hotels.

In January, McKillen stepped down from managing the Beverly Hills and Riviera hotels, saying in a message to staff that he “would no longer be involved with these incredible properties.”

Maybourne said “new co-CEOs have been appointed to create a new global ultra-luxury hotel brand following Paddy’s resignation from two of our hotels”, but declined to comment further.

Claridge’s, which is charging £100,000 a night for its penthouse suite after the McKillen refurbishment, had its best trading month ever last month, according to a person close to hotel management.

Maybourne’s board is chaired by Michele Faissola, another former Deutsche Bank executive who was among 13 bankers who were sentenced to prison in connection with an investigation into tampering with accounts at the bank Italian Monte dei Paschi di Siena in 2019. Faissola appealed against this. penalty and remains free.

The Al-Thani family is one of Deutsche Bank’s major shareholders. Faissola runs Dilmon, Al-Thani’s family office.