June 8 (Bloomberg) -- Elad Group is close to selling its stake in New York’s Plaza Hotel to Sahara India Pariwar, and property co-owner Kingdom Holding Co., controlled by Saudi billionaire Prince Alwaleed bin Talal, will hold a 25 percent stake after the deal is done, said a person with knowledge of the transaction.
Sahara India Pariwar signed a letter of intent to purchase the hotel for $575 million from closely held Elad and Kingdom, which will buy back a portion, said the person, who asked not to be identified because the talks are private. The transaction is set for completion in early July, the person said. Fairmont Hotels & Resorts, in which Kingdom has a stake, will continue to operate the Plaza for at least two years, the person said.
Sahara India Pariwar, which bought London’s Grosvenor House luxury hotel in 2010, made an offer in April to buy the Plaza, a century-old destination for socialites and celebrities near Manhattan’s Central Park. Negotiations were complicated by Sahara India Pariwar’s desire to take over management of the property, according to the person with knowledge of the deal.
Kingdom has a 50 percent stake of the Plaza’s 130 hotel rooms and public areas, and owns 25 percent of the 100 rooms that were sold as condominiums and rented out as hotel rooms, the person said. After the transaction is completed, Kingdom will own 25 percent of the entire property, the person said.
Josh Greenwald, a spokesman for Elad, declined to comment. Representatives for Sahara India Pariwar didn’t respond to requests for comment. Charles Henry, a spokesman for Kingdom, also declined to comment today.
“The prince’s objective is to be a long-term investor in this kind of iconic asset,” Henry said in an April interview after India’s Economic Times reported Sahara India Pariwar’s offer.
Kingdom, which in 2004 sold its stake in the Plaza to Elad and bought back a portion soon after, has retained investments in other landmark properties. On May 8, Los Angeles-based Woodridge Capital Partners LLC said Alwaleed would keep his interest in the Fairmont San Francisco Hotel after he and partner Maritz Wolff & Co. agreed in March to sell the Nob Hill property to Woodridge and Oaktree Capital Management LP for almost $200 million.
The Plaza reopened in March 2008 following a two-year restoration that cost more than $400 million.
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