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By Kent Larsen
Marriott Abandons Bid for Le Meridien in Final Round
WASHINGTON, DC -- Marriott, International, the giant hotel chain run by LDS
Church member J. Willard "Bill" Marriott Jr., dropped its bid for the Le
Meridien chain of luxury hotels after it wasn't named the preferred bidder
in the final round. The auction of the 150-hotel chain was part of the
auction of the hotel properties of Compass Group PLC, in what has been
called the world's largest hotel auction. Marriott had been expected to win
Le Meridien, and dropping its bid led to the company's stock price to fall
5% yesterday.
Marriott has been involved in the bidding for Le Meridien since last Fall,
as Mormon News has previously reported. Until the bids were announced
earlier this week, Marriott was widely expected to win Le Meridien, seen by
analysts as a platform that would allow Marriott to expand outside the US
and into Europe. Currently Marriott's more than 2,300 hotels are primarily
in the US.
Marriott's final bid was much lower than expected, apparently because of a
weakening market for hotel rooms in the US. Marriott's bid of 1.7 billion
pounds ($2.4 billion), was about 10% less than the competing bid, 1.85
billion pounds ($2.65 billion), from Nomura Securities. Nomura is a relative
newcomer to hotels, having purchased its first chain just this past January.
Analysts reacted negatively to Marriott's decision, "We think Marriott's
stated goal of expanding in Europe may prove more difficult without the
Meridien platform and could, generally, pose a risk to our longer-term
growth estimates," ABN AMRO lodging analyst Joe Greff said in a research
note about the acquisition.
Sources:
Marriott says pulls out of Meridien talks
Reuters 3May01 B4
Nomura to win Meridien as Marriott passes
Reuters 3May01 B4
Marriott International Announces Withdrawal From Discussions to Acquire Le Meridien
PRNewswire 3May01 B4
See also:
Marriott in Auction Battle to Acquire Hotel Group
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