has landed a major role advising Lehman Brothers on its acquisition of Le Meridien, the troubled London-based hotel group.
The magic circle firm scooped the mandate to act for Lehman after elbowing out Slaughter and May in January 2004 to advise the US bank on the acquisition of Meridien’s senior debt from its 14-strong lending consortium.
Slaughters advised Lehman when Meridien was bought by Japanese bank Nomura International in 2001 following a seven-month auction. Lehman provided mezzanine debt for the original acquisition, while Merrill Lynch and CIBC World Markets provided just under £1bn of senior debt.
Lehman, now one of Meridien’s biggest creditors, has teamed up with US investment management firm Starwood Capital to buy the group’s owned and leased hotel portfolio, including the Forte Village in Sardinia.
As part of the deal, Starwood Hotels, which is unrelated to Starwood Capital, will buy the ‘Le Meridien’ brand and the related management and franchise business from Meridien. Starwood Hotels will also enter into management agreements for the 36 owned and leased Meridien properties to be acquired by the new Lehman/Starwood Capital 50-50 joint venture.
Freshfields finance partner David Ereira, who is leading the team advising Lehman, said the deal is interesting in that it is being done outside of any formal insolvency procedures.
The deal, which is subject to approval by the boards or the internal committees of Starwood Hotels, Lehman, Starwood Partners and Meridien, is expected to be completed by the third quarter of 2005.