Sahara spurns $1.3-bn new offer for overseas hotels

In a statement the group said, the proposal is an attempt to ruin the market and disturb existing bidders

Embattled Sahara group on Wednesday spurned a $1.3-billion offer for its three prized overseas hotels, including Grosvenor House and Park Plaza, terming it as a “devious attempt” to lower the price even as the suitor maintained the proposal is “very compelling”.

The offer was made by a consortium of family office investors, comprising Jesdev Saggar-led 3 Associates of the UK and others from the West Asian, for acquiring Sahara’s majority stake in three marquee hotel properties — the famed Grosvenor House in London, as well as the Park Plaza and Dream Downtown in New York. Saggar, managing director of 3 Associates who termed its offer as the “largest hotel bid in the UK history”, said the consortium has made a “very compelling offer” and it was a long-term investment opportunity for them.

Amid speculation that the fresh offer may trigger a bidding war as Sahara was already in talks with a few others including some Qatar-based investors for these hotels, the group was quick to spurn the proposal saying it was an attempt to ruin the market and disturb existing bidders at market value that was “much higher”.

Saggar, Managing Director of 3 Associates which termed its offer as the "largest hotel bid in the UK history", said the consortium has made a "very compelling offer" and it was a long-term investment opportunity for them.

In a strongly-worded reaction, a Sahara spokesperson however termed it "a malicious and non-serious act of some wrong people".

"The said proposal is baseless. It is a devious attempt to benchmark the price much lower than the actual market value of the properties in order to ruin the market and disturb the sentiment of the actual bidders who are bidding at market value which is much higher," the spokesperson said.

Sahara group, whose chief Subrata Roy was in jail for over two years in connection with a long-running dispute with markets regulator Sebi and is now out on parole, has been trying hard to raise funds, including through refinancing of loans on its overseas hotels.

Responding to Sahara's rejection of the $1.3 billion offer, Saggar said: "We have followed the process and submitted in a compliant manner. If the bid is rejected then they should use the same process to communicate.

"This is a long-term investment opportunity for us. We have submitted a very compelling offer. It is now up to the Supreme Court and the Roy family."

Seeking to raise funds, the beleaguered Saharas are already in talks with Qatar-based investors for a potential deal for the three hotels. Last year, the group was also in discussions with US-based Mirach Capital but the talks fell through amid a public spat between the two sides.

As per the website of 3 Associates, its founders and Multi Family office network have completed over 314 million pounds worth transactions since 2014, including hotels and commercial offices in the UK, the UAE and India.

It also claims to have "access to one of the largest pools of family office equity in the Middle East".

Grosvenor House, a landmark on London's Park Lane and designed by acclaimed architect Sir Edwin Lutyens, was bought by Saharas in 2010. The two US hotels were purchased later.

The three hotels were acquired between 2010-2012 at an estimated valuation of $1.55 billion.

The 110-year-old Plaza in New York is situated off Central Park and its ownership has changed hands several times.

Currently, Sahara has about 75 per cent and remaining 25 per cent is with Prince Al-Waleed bin Talal of Saudi Arabia.

In March last year, Bank of China had put Grosvenor House under "administration" for recovery of its loans from Sahara after declaring "an event of default" on the US loans due to some technical breaches in the financial covenants.

The loan on Sahara's three hotels -- Grosvenor House in the UK and the two prime hotels in New York -- from Bank of China was "cross collateralised and cross guaranteed".

Subsequently, Sahara reached a $850 million (Rs 5,500 crore) refinancing deal with India-born billionaire brothers David and Simon Reuben and averted the 'default-triggered' sale of Grosvenor House hotel property.

The past owners of Plaza hotel in New York include realty tycoon and US Presidential candidate Donald Trump, who married his second wife Marla Maples in this hotel.

The hotel, which has 282 rooms in addition to several condos, restaurants and shops, had hosted the famous Plaza Accord to devalue the US dollar in 1985.

Sahara group has been engaged in a legal battle with Sebi for long over a case involving raising of funds from investors to the tune of over Rs 24,000 crore. Sahara, however, claims it has already repaid 95 per cent of the investors' money directly.