Report: Sahara Group in talks to buy Plaza Hotel from Tshuva
Israeli billionaire's North American real estate arm negotiating with India's Sahara Group on sale of New York landmark for roughly $600M
The Sahara Group is in exclusive talks to acquire the Plaza Hotel in New York from Israeli billionaire Yitzhak Tshuva for around $600 million, Indian newspaper Economic Times reported.
According to the report, the Sahara Group, one of India's largest companies, has been negotiating with Elad Group, Tshuva's private North American real estate arm.
A person familiar with the negotiations said Sahara, which bought the Grosvenor House hotel in December 2010 for $726 million, is carrying out a due diligence of the asset and has paid an advance to Elad Group, the property's owners.
If the negotiations succeed, the deal will be executed through Sahara's Mauritius-based subsidiary Aamby Valley (Mauritius) Ltd., Economic Times reported.
Plaza Hotel in New York
The Plaza was acquired by El Ad, which is controlled by Tshuva, in 2004 for $675 million. The group subsequently spent another $400 million on renovation, and parts of the building were sold off as luxury residential units.
The report said ownership of the 20-storey Plaza, which overlooks New York's Central Park and is one of Manhattan's landmark structures, could "catapult the Indian group, whose main interest in hospitality now essentially involves running a hotel in Mumbai, into the super-luxury segment of the industry with two very distinctive properties under its belt."
The Sahara Group purchased the Ritz-Carlton in Boston in 2007 for $170 million and renamed it Taj Boston. It re-entered the New York market in 2005 after six years with the rights to manage the 201-room Pierre.
Economic Times said that under the terms being discussed for The Plaza, the aggregate consideration for the property includes two parts. The hotel part, which comprises 100 condominium rooms and 130 large-size non-condominium rooms, is being valued at around $400 million while a premium retail space housing leading luxury brands is being valued at around $200 million.
Sahara has also put a condition that if a deal gets consummated, the Plaza's present owners will have to terminate their management agreement with Canada's Fairmont Hotels & Resorts with immediate effect, sources told the Indian newspaper.
