US fund Starwood swallows Taittinger empire

22nd July 2005, Comments 0 comments

PARIS, July 22 (AFP) - US finance in the form of Starwood Capital is buying Taittinger, one of the last family business empires in France, associated with high living under its own champagne label, the Paris Crillon hotel and Baccarat crystal.

PARIS, July 22 (AFP) - US finance in the form of Starwood Capital is buying Taittinger, one of the last family business empires in France, associated with high living under its own champagne label, the Paris Crillon hotel and Baccarat crystal.

The complex financial details put a net value after debt on the entire group of about EUR 2.0 billion.

The Taittinger family, one of the last families in France to lead a business empire, owns 37.8 percent of the Taittinger Group and has found a buyer less than a month after saying it wanted to sell by the end of July.

The takeover of the business, built up from Taittinger champagne which may well remain in French hands, came at the end of a week marked by national controversy over a rumoured bid in prospect by another US group, PepsiCo for table-water, yoghurt and biscuit giant Danone.

Taittinger Group holds a controlling 44.1-percent stake in its main cash cow Societe du Louvre, which owns the Le Crillon and Lutetia hotels in Paris, crystal maker Baccarat and Annick Goutal perfumes. The two hotels have "palace" status and the Crillon is considered to be particularly prestigious because it overlooks Place de la Concorde, a central landmark in Paris.

Under the agreement, unwrapped Friday and subject to regulatory approval, real-estate investment fund Starwood Capital said it would pay about EUR 1.2 billion in cash for the controlling shares in the Taittinger Group and its main subsidiary Societe du Louvre.

Because of the complex nature of the French holding, Starwood is to acquire initially the controlling shares, owned by the Taittinger family, by Compagnie nationale de participations controlled by Belgian financier Albert Frere, and by the Peugeot family's FFP.

The combined stakes amount to 65 percent of the Taittinger Group and 65.48 percent of Societe du Louvre.

Starwood said it would pay in cash EUR 336.24 per share of the Taittinger Group and EUR 147.06 per share of Societe du Louvre and would then offer cash for the remaining, publicly traded shares in the two companies.

Starwood valued the entire Taittinger Group at EUR 1.166 million and Societe du Louvre at EUR 1.689 million. Excluding debt, the two companies were valued at EUR 2.1 billion.

Starwood said it wanted to build on the group's "proud heritage", noting that Taittinger was the world's sixth-largest champagne producer and Societe du Louvre was Europe's second-largest hotel network.

"The Taittinger family and its fine management teams have built and assembled an extraordinary collection of assets, including some of Europes finest luxury hotels," said Barry Sternlicht, chairman and chief executive of Starwood Capital.

"We look forward to building on the company's proud heritage by growing its economy hotel business in France and into new markets, particularly Eastern Europe," he said in a statement.

Prime Minister Dominique de Villepin refused to comment on the Starwood takeover, but reiterated his "determination to defend French industry".

On Wednesday the prime minister had been more specific about the reputed hostile bid from PepsiCo, saying: "A group like Danone is obviously one of our industrial treasures and we will of course defend the interests of France."

Starwood CEO Sternlicht addressed the question of a mooted spin-off of Taittinger champagne and its two and a half centuries of tradition.

"We welcome the Taittinger family's advice and counsel as we work to ensure that the company's prized champagne business finds an appropriate home."

Anne-Claire Taittinger, chairwoman of the Taittinger Group, said: "We are also very pleased that Barry is committed to taking our advice in finding the most suitable solutions for the champagne business, which carries our name and heritage."

Shares in Taittinger and Societe du Louvre were showing losses in midday Paris trading. Taittinger was down by 10.58 percent to EUR 331.30 and Societe du Louvre by 6.99 percent to EUR 145.00. Meanwhile, the CAC 40 index retreated 0.36 percent.

Starwood Capital is a privately held real-estate investment fund based in Greenwich, Connecticut, with an international portfolio that includes residential and commercial property, health clubs and golf courses.

Copyright AFP

Subject: French news

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