After investing in real estate in Pune and Mumbai, billionaire Dr Cyrus Poonawalla and son Adar Poonawalla of city based Poonawalla Group are aiming to acquire the prestigious Grosvenor House Hotel in London. Located in upscale Mayfair area of London, the 6,50,000 square feet hotel has come up for sale after the Supreme Court allowed its present owners Sahara group to sell international assets to pay for the bail of its incarcerated chairman Subrato Roy Sahara.
Dr Poonawalla, chairman of the group, confirmed that he had bid for the hotel, but said he would not like to be drawn into a price war. Dr Poonawalla said that the bid of 550 million pounds was done after due diligence.
“We are interested in the luxury hotel segment and the pricing was done based on valuation,” he said.
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Poonawalla considers it to be the best property in London for location and size apart from the large ballroom and conferencing facility which is among the largest in Europe. It hosts business events, fashion shows and award nights.
Adar Poonawalla said that negotiations started two months back and the initial bid was for 470 million pounds, which was later hiked to 550 million pounds.
He is waiting to hear form Sahara Group who are hoping to get higher valuations from Middle East investors.
“It can still come our way,” says Adar Poonawalla adding that it is a complicated issue and they are in the best position to handle it so he sees their chances are good but are not sure when the deal could be closed.
He added that they did not see it going beyond this as they are already valuing it at 18 to 19 times (earnings before deduction of interest tax and amortization expenses) EBIDTA which is high for the hotel industry where normal bid is made at eight, nine or 10 times the EBIDTA.
Poonawalla said they would be putting in around Rs 1,500 to 2,000 crore towards equity.
“The deal will be subject to all necessary permissions and sanctions from the government of India,” Dr Poonawalla added. When asked if he was interested in acquiring any properties of Sahara group in the US, Dr Poonawalla replied in the negative.