Business

Claridges owner removes directors in series over share value

Claridge’s, one of Britain’s most luxurious hotels, is facing a new dispute between its owners, seven years after a Qatari king joined forces with an Irish property developer in a fight for control of his parent company.

Constellation Hotels, ultimately owned by Sheikh Hamad bin Jassim bin Jaber al-Thani, has ousted Patrick McKillen from the board of Maybourne Hotels, Claridge’s parent company, as they argue over the value of a stake in the company that could be worth more than £1bn to McKillen.

McKillen and his longtime associate Liam Cunningham were removed from the board without warning, according to two people with knowledge of last weekend’s events.

Neither Cunningham nor McKillen who ran and renovated the group’s hotels over the past seven years were at the meeting where the decision was made, they both said.

Ownership disputes at Maybourne, which owns Claridge’s, Berkeley and Connaught hotels and locations in Los Angeles and the French Riviera, have been ongoing since the Barclay brothers, also owners of the Daily Telegraph, attempted to buy Maybourne’s stake in Coroin in 2011, which prompted McKillen to fight back and start one of the most high-profile and costly shareholder battles in the UK in recent memory.

The Qataris came through Constellation Hotels to support McKillen, one of the original Coroin owners, which ultimately allowed him fend off Barclays’ offer after four years of litigation.

McKillen is set to receive a deferred payout after selling his 36 per cent stake in the company as part of Constellation’s deal to buy Maybourne for £1.3bn in 2015, a deal that leaves McKillen to run the hotels until December bound this year. The amount of the payment is to be decided later this month.

According to a person familiar with the contract, McKillen is entitled to a payout equal to the value of the hotels less the original transaction value of £1.3billion and the value of Constellation’s equity investment to restore the hotels.

Maybourne could be worth more than £5bn given the recent rebound in the luxury hotel business due to the easing of pandemic restrictions and based on recent sale prices of similar assets, according to a person close to the two former directors.

A person close to Constellation said she will “fulfil her commitments.”

When Constellation removed McKillen from the board, it appointed Marc Socker, who worked in hospitality, and Gianluca Muzzi, a former Deutsche Bank executive, as Maybourne’s new co-CEOs without McKillen’s knowledge.

The Qataris are “notoriously tough partners,” said a person close to McKillen. “Paddy is completely confused. He couldn’t have expanded better [and] Renovation of the hotels.”

In January, McKillen resigned from running the Beverly Hills and Riviera hotels, stating in a message to employees that he “would no longer be involved with these amazing properties.”

Maybourne said that “new joint managing directors have been appointed to create a new global ultra-luxury hospitality brand after Paddy stepped down from two of our hotels,” but declined to comment further.

Claridge’s, which is charging £100,000 a night for its penthouse suite after McKillen’s refurbishment, had its best trading month in its history last month, according to a person close to the hotel’s management.

Maybourne’s board of directors is chaired by Michele Faissola, another former Deutsche Bank executive who was among 13 bankers arrested as part of an investigation into the Falsification of Accounts at Italian bank Monte dei Paschi di Siena in 2019. Faissola has appealed this verdict and remains at large.

The Al-Thani family is a major shareholder in Deutsche Bank. Faissola heads Dilmon, the Al-Thani family office.

https://www.ft.com/content/4e9a65ef-06b6-4f32-bc5d-49989afd60e6 Claridges owner removes directors in series over share value

Adam Bradshaw

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