LVMH Moet Hennessy Louis Vuitton said to be in talks to by the Aman Chain (BBG)

Discussion in 'Luxury Hotels' started by NYBanker, Sep 7, 2011.  |  Print Topic

  1. NYBanker
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    NYBanker Gold Member

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    From Bloomberg:
    LVMH Moet Hennessy Louis Vuitton SA (MC) is among companies that might be seeking to acquire luxury-hotel chain Amanresorts International Pte, said two people with knowledge of the matter.
    DLF Ltd. (DLFU), an Indian real estate developer, has received at least five non-binding bids of $400 million to $450 million for Amanresorts, one of the people said, speaking on condition of anonymity as the details are private. Amanresorts owns and manages 25 small luxury resorts worldwide, according to its website.
    LVMH, the maker of Celine handbags and TAG Heuer watches, said in April 2010 it plans to open two luxury property developments on islands in Oman and Egypt under the Cheval Blanc brand. New Delhi-based DLF is seeking to raise as much as 100 billion rupees ($2.2 billion) through asset sales to repay debt, according to its latest annual report.
    Spokespeople for Paris-based LVMH, the world’s largest luxury-goods maker, and DLF declined to comment on the deal.
    Private-equity firms are among bidders for Amanresorts, one of the people said without naming the companies. The flagship Amanpuri in Phuket on Thailand’s coast was built in 1987 and rooms as the resort start at $525 per night in September, according to its website.
    DLF may sell part of its stake in the Amanresorts to a “strategic partner,” Executive Director Saurabh Chawla said on a conference call with analysts on July 29. The company plans to keep the Amanresort in New Delhi, two people with knowledge of the matter said. DLF’s interest costs jumped almost six times in the latest fiscal year ended March 31 from four years earlier, according to data compiled by Bloomberg.
    The Indian company bought a controlling stake in Amanresorts in November 2007 for about $400 million, including $150 million of net debt. DLF took full ownership of the hotel chain during the fiscal year that ended March 31 after settling litigation with minority shareholders, according to its annual report.
    The first Maison Cheval Blanc hotel was built by LVMH Chairman Bernard Arnault at the French ski resort of Courchevel in 2006.

    http://www.bloomberg.com/news/2011-...for-dlf-s-amanresorts-luxury-hotel-chain.html
     
  2. uggboy
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    uggboy Gold Member

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    Amazing story, we will see how this goes further!:)
     
  3. Gaucho
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    Gaucho Gold Member

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    I wonder if the house sparkler of the Aman Chain will now have to be Dom Perignon....?
     
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  4. TRAVELSIG
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    TRAVELSIG Gold Member

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    I have been following this for a few weeks now with keen interest- I don't think this will be a very good development for Aman in the meaning of service/value for clients- however for the current shareholders could be an amazing return on investment.
     
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  5. Gaucho
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    Gaucho Gold Member

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    Why are you worried about the service aspect....?? Why should ownership change the current status quo...?
     
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  6. TRAVELSIG
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    Well... presumably the current shareholders will only sell at a significant premium.
    And for sure the average enterprise value of LVMH is EBITDA X 14 (quoted company).
    Presumably a significant amount of leverage will be used in the purchase of Aman.
    This means Aman will have to service large debt while at the same time having extraordinary financial results.
    There will be three ways to do this:

    1) Use the LVMH sales channels and database to significantly increase occupancy at Aman resorts

    2) Use the LVMH cost control system to significantly reduce operating expenses

    3) Use the LVMH clout and name to increase REVPAR

    As noted previously- while excellent for shareholders, the customer may miss the "good old days" of yesteryear.
     
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  7. Gaucho
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    Gaucho Gold Member

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    Ah yes.... those darned IBankers..... curse them !!! ;)
     
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