Sahara's success mantra: Buy undervalued trophy assets abroad?

Subrata Roy-led Sahara India is all set to own a century-old iconic property in the US, a favorite of all socialites and celebrities near Manhattan’s Central Park. The _Economic Times_ reported that Roy, who also owns an IPL team and part owns a Formula One racing time, is expanding his overseas hotel business by buying a 75 percent stake in New York’s Plaza Hotel for Rs 3,100 crore just two years after it bought London’s Grosvenor House for Rs 3,250 crore (470 million pounds.) The London acquisition marked Sahara’s entry into international hospitality market, which company to launch other business ventures outside India.

The 105-year old landmark property in New York includes guests like Marilyn Monroe and the Beatles. Opened in 1907, the French Renaissance chateau-style building hosted several notables over the course of its history. The 282-room luxury hotel was renovated extensively for $450 million and reopened in 2008.

Saudi Prince Alwaleed bin Talal’s Kingdom Holdings, which is a part-owner of the Plaza property with El Ad, an arm of the Israeli Tshuva Group, will retain 25 percent in the property. Kingdom also owns a stake in Fairmont Hotels & Resorts, the Plaza’s management operator, which Sahara wanted to terminate in favor of its own management. However, Fairmont Hotels & Resorts will continue to operate the Plaza for two years before handing over control to Sahara.

Roy is also poised to clinch a Rs 445-crore deal to acquire Indian-American hotelier Sant Singh Chatwal’s flagship property, Dream Dowtown Hotel, in New York. A recent_India Today_ report saidinvestment is being routed through the group’s subsidiary, Aamby Valley Ltd, registered in Mauritius.

Since the Grosvenor House in London’s Mayfair, Roy has since been on the lookout for more such trophy assets. The group is also negotiating to buy out a bunch of Marriott Hotels in London valued at Rs 5805 crore (750 million pounds,) the Times of India reported . However, while Sahara will have controlling stake in these properties, affluent Gulf investors will hold a minority stake, the report said.