McKillen considering options on Maybourne hotels

BUSINESSMAN PADDY Mc Killen, a 37 per cent shareholder in the Maybourne Hotel Group, is considering his options and consulting advisers as the Barclay brothers, owners of the Ritz in London, prepare to take a controlling stake in the luxury five-star hotel group.

Mr McKillen is assessing the validity of the Barclays’ purchase of stakes held by the family of Manchester businessman Peter Green and heavily-indebted investor Derek Quinlan, according to sources familiar with the situation.

The National Asset Management Agency (Nama), which owns most of Mr Quinlan’s loans, is not believed to have signed off on the sale of his shareholding in the hotel group.

Mr McKillen plans to resist any attempt by the Barclay brothers to take outright ownership of the group, as he had planned to hold his investment for the long term.

Under the agreement among the Maybourne shareholders, each investor must offer first refusal to their fellow shareholders if they decide to sell their interest in the group which owns the five-star London hotels, Claridge’s, the Berkeley and the Connaught.

The Barclay brothers, owners of the Telegraph Media Group, confirmed last Friday that they were acquiring a 24.8 per cent stake in Coroin, the firm behind the group.

The stake was acquired through the purchase of Misland, a company based in Cyprus and controlled by the Green family which held their shares in the hotel group. The Green family’s business interests are managed from the offices of a firm called Greenaap on Merrion Square in Dublin.

This week the brothers reached agreement with Mr Quinlan to acquire his 35 per cent stake in the company, which would give them a 60 per cent stake in the group.

A spokeswoman for the brothers had no comment to make on the first-refusal clause among shareholders. A spokeswoman for Mr McKillen also refused to comment. It is understood Mr McKillen is assessing whether there has been a breach of his pre-emption rights and good faith clauses in the shareholders’ agreement with the other investors in Coroin.

The original shareholder agreement dates to May 2004, when Mr Quinlan led the purchase of the group for €1.1 billion (£750 million). It has been amended seven times, most recently in October 2009, due to changes in ownership and structure.

Mr Quinlan is selling many of his investments to clear about €600 million of debts due largely to Nama, which acquired many of his loans from the Irish banks.

Nama, which holds security over part of Mr Quinlan’s interest in the Maybourne group, must approve the sale of his stake. A Nama spokesman said that it did not comment on borrowers.

Mr McKillen is awaiting a Supreme Court judgment in the appeal on his failed legal challenge against the transfer of more than €800 million of loans to Nama.

He had claimed in his case against Nama that he had received an offer of more than €1.1 billion for the Maybourne group, which has bank debts of €800 million.