McKillen ‘puts hotels out of Barclays’ reach’

The multi-million-euro battle for control of three of London’s most prestigious hotels pitting Irish businessman Patrick McKillen against billionaire brothers David and Frederick Barclay has finally been resolved.

Mr McKillen has refinanced his loans in the holding firm Coroin Ltd, that owns Claridge’s, Connaught and Berkeley hotels.

With the backing of Tom Barrack’s Colony Capital, Mr McKillen said he has put control of the hotels beyond the grasp of the Barclays and repaid his loans to IBRC.

“I am delighted to have agreed to a long-term funding agreement with Colony Capital that puts the emergency liquidation of IBRC saga behind us.

“I remain the largest shareholder in Coroin and today’s deal takes my stake in the hotels firmly out of the reach of the Barclay brothers who will now not be able to succeed with the hostile takeover of the hotels they launched over three years ago,” said Mr McKillen.

In the High Court yesterday, Michael Cush, counsel for Mr McKillen, told Mr Justice Paul Gilligan as there had been “a development in the bidding process” on Tuesday, it was now not necessary for the case to proceed next week.

He asked it be adjourned for two weeks for mention when all matters, including the question of costs so far, could be dealt with.

The Barclay brothers had previously bought Derek Quinlan’s €800m worth of loans from Nama, giving them control of his 35.8% stake in Coroin. However, this sale cannot be completed because, under the terms of the shareholder’s agreement, Mr McKillen is to receive right of first refusal once a current shareholder seeks to dispose of shares.

Mr McKillen intends to buy the quota of Quinlan’s shares he is entitled to acquire, bringing his stake to in the luxury hotels to 54%.

“The Barclays have spent an enormous amount of money on the 28% stake in Coroin they acquired by circumventing the shareholder’s agreement. They cannot do that again. Their current arrangement with Quinlan is unsustainable. Several months ago, I offered to buy their stake in Coroin and that offer remains on the table. They cannot continue to support Derek Quinlan indefinitely and their banks will not continue to finance a takeover that cannot succeed,” Mr McKillen said.