Starwood Plans 70-Plus Hotel Expansion.

In December 2003, Starwood Hotels & Resorts Worldwide Inc. and Lehman Brothers Holdings Inc. acquired all of the outstanding debt, estimated to be approximately $1.3 billion, of London-based Le Meridien Hotels and Resorts Ltd. at an undisclosed discount price. Starwood funded $200 million through a high yield junior participation in the debt, while Lehman owns the remaining senior debt of approximately $1.1 billion. According to a Starwood spokesperson, the company has been in ongoing talks with Lehman Brothers to acquire the brand. "We want the brand and are anxious to wrap this up," the spokesperson tells GlobeSt.com. Le Meridian would then be another brand in Starwood's stable that includes Westin, Sheraton, W, St. Regis, the Luxury Collection and Four Points by Sheraton.

"As is the case with our other brands, we would manage some Le Meridian hotels and franchise others. We would also likely own some hotels, though we are more interested in owning the brand and less interested in owning the real estate," the spokesperson continues. "Owning Le Meridien would increase our distribution, especially outside the US, and complement our position as the leader in the upscale and upper-upscale hotel segment."

The Le Meridien portfolio includes more than 120 upscale hotels and resorts, Starwood owns more than 740 properties in over 80 countries. "Lehman stepped up to the plate," says Thomas McConnell, senior managing director of Cushman & Wakefield's Hotel Transactions Group. "to protect their own position. Conditions have improved a lot, but the weak dollar has helped the US market more than the European. Lehman would be happy to sell and it's a great move for Starwood to get more brand presence, particularly in Europe."