Diversified business group Sahara India, whose businesses range from airlines, luxury resorts to media and finance, has agreed to buy a controlling stake in New York's The Plaza Hotel from Israeli entrepreneur Isaac Tshuva's Elad Properties, for $570 million.
Elad owns the hotel portion of the Plaza, which has 230 rooms, and the retail portion of the hotel, which encompasses the hotel's banquet hall, fitness centre and other common areas.
Kingdom Holdings, controlled by Saudi billionaire Prince Alwaleed bin Talal, owns 50 per cent of an entity that holds 130 of the Plaza's rooms and 25 per cent of another entity that holds 100 rooms that were sold as condominiums but are still rented out as hotel rooms. El Ad owns the rest.
Under the deal, Lucknow-based Sahara will buy 75 per cent of The Plaza Hotel, which includes the entire 60 per cent held by Elad for $400 million and 15 per cent from Kingdom for $170 million.
Post completion of the deal, Kingdom will hold 25 per cent of The Plaza Hotel and Fairmont Hotels & Resorts Inc, in which Kingdom has a stake, will continue to operate the Plaza for at least two years, before handing over control to Sahara.
New York-based El Ad had acquired its stake in The Plaza Hotel in 2004 for $675 million, and sold the condominiums for $1.5 billion after extensive renovations, netting a $500 million profit.