Victory for Barclay brothers in £1bn hotels fight
Billionaire pair close in on full control of five-star chain after key court ruling
Saturday 11 August 2012
The billionaire Barclay brothers tightened their grip over a glittering £1bn trio of London's top hotels yesterday after winning a crucial court victory over a rival shareholder.
The owners of the Telegraph newspaper group, who already own the Ritz, have fought a three-month tug-of-war with Belfast-born developer with Paddy McKillen which looks likely to decide the ownership of the five-star Berkeley, Connaught and Claridge's hotels.
The bitter battle for control of Maybourne, the company that owns the three hotels, has racked up an estimated £15m in legal fees. The eagerly awaited judgment could see Sir David and Sir Frederick, who failed to appear in court during the 30-day trial, secure full control of the group by the end of this year.
The complex history of the dispute stretches back to 2004. Mr McKillen was one of five shareholders in Coroin, a company that bought the Savoy Hotel Group for €1.1bn (£863m), backed by €800m in debt. Coroin, fronted by former Irish property poster boy Derek Quinlain, sold the Savoy to Arabia's Prince al-Waleed and then renamed the Berkeley, Claridge's and the Connaught under the Maybourne banner.
The original Coroin shareholders fell to three during the next six years, leaving Mr McKillen with 36.2 per cent, Mr Quinlain with 35.4 per cent and Misland – a Cyprus-based trust .
But in January last year, the Barclays gained a foothold in Maybourne by buying Misland for £70m. Meanwhile, several of Mr Quinlain's property investments defaulted in the crash and his debts were taken into Ireland's state-owned "bad bank", Nama. The Barclays did a deal with Nama to buy Mr Quinlain's debts, giving them effective control of his stake and majority control of Maybourne. The brothers also own the €660m debts of Coroin.
Mr McKillen launched the legal action claiming that as an original shareholder in Coroin, he had first refusal over the shares of Misland and Mr Quinlain. But the judge dismissed Mr McKillen's claim.
A spokesman for Mr McKillen said he was disappointed with the judgment and was considering his options about an appeal. "The Barclay brothers' sole intention was to assume 100 per cent control of the hotels by any means necessary. We brought this case to High Court to protect our interest in the finest hotels in London," he added.
Speaking to The Independent, Mr McKillen added: "I may have lost this battle by I will win the war for control of the three hotels."
He claimed he would still be able to increase his total shareholding to a total of 56%.
The brothers' spokesman, Richard Faber, said: "We are delighted that today's judgment has completely vindicated the Barclay interests' position and brought to an end this unnecessary and distracting dispute.
"It should never have been necessary for the Barclay interests to defend these baseless proceedings, which we always believed were an attempt by Mr McKillen to tarnish the Barclay interests' reputation in the misconceived hope that they would then sell out to him."
Diving in at the deep end is no excuse for shirking the style stakes
- 1 Stephen Fry ‘criticises Operation Yewtree in dinner party rant’ calling for tougher laws to deter false sex abuse allegations
- 2 Why I'm on the brink of burning my Israeli passport
- 3 Israel-Gaza conflict: ‘Sderot cinema’ image shows Israelis with popcorn and chairs 'cheering as missiles strike Palestinian targets'
- 4 War is war: Why I stand with Israel
- 5 Blackest is the new black: Scientists have developed a material so dark that you can't see it...
Sustained immigration has not harmed Britons' employment, say government advisers
War is war: Why I stand with Israel
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
Socialist Worker called to apologise over ‘vile’ article saying Eton schoolboy Horatio Chapple's death is ‘reason to save the polar bears’
Emergency data law: David Cameron plots to bring back snoopers’ charter
NUT strike: David Cameron announces crackdown on strike action ahead of mass industrial action
iJobs Money & Business
£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...
£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...
£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...
£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...