M&C checks out of New York Plaza for $675m

"Nothing unimportant ever happens here," was once said of the New York Plaza Hotel, which has oozed the pomp and opulence of an 18th century French chateau from its site on Fifth Avenue for nearly 100 years.

"Nothing unimportant ever happens here," was once said of the New York Plaza Hotel, which has oozed the pomp and opulence of an 18th century French chateau from its site on Fifth Avenue for nearly 100 years.

But profits are pretty important to hotel owners and there just weren't enough of them at the exclusive hotel that has provided bed and board to film stars, royalty and multi-millionaires since 1907.

Millennium & Copthorne, which owns the iconic hotel in a joint-venture, yesterday said it had entered into an agreement to sell the hotel to a property investment company for $675m (£367m) in cash. It and a number of other partners bought the Plaza from Donald Trump in 1995 for $325m.

The hotel cost $12m to build in 1907 and no costs were spared in decking it out. Its restaurant was filled with gold-encrusted china and 1,650 chandeliers were fitted.

The hotel has been the backdrop to a number of films, including Alfred Hitchock's North by Northwest, Plaza Suite, where Walter Matthau played the three lead roles, The Great Gatsby, and Barefoot in the Park. A stay in its presidential suite, which was used as a pied-a-terre for the Vanderbilt family, will cost about $15,000 a night. Michael Douglas and Catherine Zeta-Jones held their wedding in the hotel in 2000.

Luxury hotels have found it particularly difficult to fill their rooms in the past two years. Although the hotel had a turnover of more than $100m in 2003 and is profitable at an operational level, it made a loss before tax of nearly $2m. Accounting for M&C's share of the hotel's liabilities, it will make around £80m from the sale, which it will use to pay down debt and boost the working capital of the group.

Kwek Leng Beng, the chairman of M&C, said the offer from the New York-based CPS One had been too good to refuse. "If appropriate, disposal of any asset will be made taking into account timing and price considerations. Compared with recent earnings generated by the hotel, the deal price is an attractive earnings multiple," he said. M&C shares moved up 8.5p to close at 312p.