Luxury London hotels sold in £750m private takeover

Four of London's best known and most exclusive hotels were taken over yesterday in a £750m private equity deal that prices each room at nearly £1m.

The Savoy Group, which comprises the 772 rooms of the Berkeley, Claridge's, the Connaught and the Savoy, is being bought by a group of investors led by Quinlan Private, a property investment and advisory group based in Ireland.

Savoy's current owners, the private equity firms Blackstone and Colony Capital, will make a significant profit from the hotels. Since being bought by Blackstone and the Los Angeles-based Colony in 1998 for £520m, Savoy has been the subject of significant improvements and upgrades, including £55m spent on refurbishment at Claridge's, where rooms cost up to £3,500 a night.

The renowned chef Gordon Ramsey runs the hotel's highly rated restaurant and stars such as Kate Moss are regularly spotted sipping champagne in its bar. The Savoy Grill has also undergone radical refurbishments to bring in a younger and more upmarket clientele.

The partners at Quinlan believe the group's existing owners have sold out too soon, without benefiting from the investments they have made. Derek Quinlan, the Irish accountant who chairs Quinlan, yesterday said: "Our investment will respect the iconic status of the group."

The proposed deal, which is expected to be completed by 8 May, expands Quinlan's portfolio that already includes the recently acquired Four Seasons hotels in Milan, Budapest and Prague. It currently has around 140 properties in its estate, including office blocks, shopping centres and car parks.

Blackstone and Colony had initially planned to sell only Claridges, revealing in October last year that they had hired the investment bank Deutsche Bank and the real estate agency Jones Lang Lasalle to run the process.

Quinlan had decided to walk away from the Claridges auction as it thought the expected price was too high. But last month Quinlan heard that the whole business was up for grabs and moved back in to the bidding.

The Savoy Group accounts for more than half the luxury hotel space in London.