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Lehman strikes hotel chain deal.

Investment bank Lehman Brothers struck a deal yesterday with the senior lenders of Le Meridien to take control of the embattled hotel chain, according to sources.

The Shakespeare and Alveston Manor in Stratford-upon-Avon are part of Le Meridien.

The deal does not include 11 hotels -including the flagship Grosvenor House and Waldorf in London -which are owned by the Royal Bank of Scotland. RBS could still put the properties into administration, said the sources. RBS declined to comment.

The deal between Lehman and Meridien's lending banks, led by Merrill Lynch and Canada's CIBC, ends weeks of speculation about the hotel chain, which breached its borrowing agreements with its banks after being hit hard by a slowing economy and slumping tourism.

Meridien and Lehman Brothers also declined to comment.

Under the terms of the deal, it is understood Lehman has brought in the privately owned Hyatt Hotels to run Meridien's 126 properties. The two will invest pounds 100 million in Meridien, and, in addition, Lehman will stump up pounds 10 million in working capital for the hotel chain.
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Title Annotation:Business
Publication:The Birmingham Post (England)
Date:Jul 30, 2003
Words:177
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