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Starwood Continues Negotiating for Le Meridien Brand

NEW YORK CITY-Negotiations are ongoing for Starwood Hotels to acquire the Le Meridien brand from Lehman Brothers. In December 2003, the pair acquired the outstanding debt of the London-based hotelier.

By Barbara Jarvie | Updated on February 24, 2005

NEW YORK CITY-Starwood Hotels is looking to further increase its presence in the upscale and upper-upscale hotel segment with the acquisition of the Le Meridien brand. This comes on the heels of its announcement of an expansion plan. For additional information on that venture, go to 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.”

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