Heeton-led consortium buys London hotel for £84.3 million

A SINGAPOREAN consortium has snapped up the Crowne Plaza London Kensington hotel for £84.3 million (S$148.9 million), in a April 11 deal that was announced on Sunday morning.

Mainboard-listed developer Heeton Holdings, which now has a 60 per cent stake in the 163-room development, went in with mainboard-listed contractor KSH Holdings and the privately held construction company Ho Lee Group, which each holding a 20 per cent interest.

The consortium bought over hotel investment holding company L.C. (London), which was incorporated in England and Wales in 1995, in a share sale and purchase agreement.

L. C. (London), which has the Crowne Plaza London Kensington as its primary asset, posted a net profit of £741,480 in 2018 on turnover of £11.8 million, according to British company records. Earnings fell by 10.4 per cent on the year before, on higher expenses, despite a rise in revenue.

The value of the hotel deal is nearly as much as Heeton's market capitalisation of S$154.4 million, the company noted in its bourse announcement - head and shoulders above the 20 per cent threshold for a major transaction, under Singapore's listing rules.

But Heeton added that the acquisition has not been regarded as such, and will not need the green light from shareholders, as it is being made in the ordinary course of business of the group - that is, property investment, property development and hospitality.

Heeton CEO Eric Teng said in a statement that the acquisition "reaffirms Heeton's intention to be a strategic player in the international hospitality sector" and brings the group's 12-hotel portfolio to eight assets in Britain, with the rest in Japan and Thailand.

"Given the enterprise value associated with the transaction, as well as the growth potential of the UK hospitality market, we believe this acquisition will add value to our current portfolio," added Mr Teng.

Heeton said in its company announcement that the acquisition was not expected to have a significant impact on its net tangible assets and earnings per share for the 12 months to Dec 31, 2019, while KSH said the same for its financial year to March 31, 2020.