Paddy McKillen's €800m victory in hotel battle with billionaires
DEVELOPER Paddy McKillen has scored his biggest victory yet in the bitter battle with British billionaire brothers David and Frederick Barclay for control of London's most prestigious hotel chain.
Last night Belfast-born Mr McKillen told this newspaper he was prepared to offer an olive branch to his rivals. He will invite them to talks to hammer out a deal for control over the chain of three luxury hotels in London.
But if the Barclays do not agree to sell their shareholding to him – or reach some other agreement about the hotels chain – he may place his stake beyond reach, he warned. "I will never sell," Mr McKillen told the Irish Independent over the phone from Hong Kong.
He made the peace overture to the Barclay brothers after he repaid €800m of loans to the IBRC, the former Anglo Irish Bank. The bank's liquidators had put the loans up for sale as part of the wider sell-off of assets.
But now the sale will not go ahead after the debt was repaid by Mr McKillen using fresh loans from US backer Colony Capital.
The loan auction had left Mr McKillen's position in the hotel chain vulnerable if the debt fell into the hands of bitter rivals and business partners, the Barclays.
That risk is now gone and Mr McKillen said he was "elated".
Mr McKillen and his rivals have fought a three-year battle in boardrooms and courtrooms for control of Coroin – a company that owns London hotels Claridge's, The Connaught and The Berkeley.
"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 take-over of the hotels they launched over three years ago," Mr McKillen said in a statement.
The High Court was earlier told that an action by Mr McKillen against the IBRC liquidators was unlikely to go ahead; the case which had been due to be heard on Tuesday was an application to stop the sale of his loans by IBRC.
It was just one the legal actions in Ireland and in the UK that have flowed from the scrap for the London hotels.
As part of the deal with US billionaire Tom Barrack's Colony Capital, Mr McKillen has refinanced the loans secured in part on his 36.2pc stake in Coroin, according to a statement.
Mr McKillen said that the deal with Colony was concluded in less than a month, after he was approached by the investors.
Colony was just one of a number of potential backers who expressed an interest, he said.
Mr McKillen is the biggest single shareholder in Coroin, with 36.2pc; David and Frederick Barclay own 28pc, while Derek Quinlan has a 35.8pc stake.
It makes the Quinlan stake the cockpit for control of the group.
The Barclays own loans that are secured on Mr Quinlan's stake; but a shareholder agreement gives Mr McKillen first refusal when that stake eventually comes up for sale.
Yesterday, the Barclay brothers tried to play down the significance of Mr McKillen's new financing deal.
"Nothing has changed with regards to Maybourne Hotel Group (the three hotels), except that instead of being charged to IBRC, Mr McKillen's minority shareholding in Maybourne is now charged to Colony Capital.
"Colony or Mr McKillen will presumably decide who will represent their interest on the board of Maybourne for which they have one of the six board seats," a spokesman said in a short statement.