LVMUY LVMH Moet Hennessy Louis Vuitton SA (PK)

By Craig Karmin 

French luxury-goods company LVMH Moet Hennessy Louis Vuitton SE is close to a deal to acquire Belmond Ltd., a London-based owner and operator of high-end hotels around the world, according to people familiar with the matter.

LVMH is near an agreement to pay $25 a share in cash for Belmond, a transaction that would value the company's equity at around $2.6 billion, these people said. That bid would represent a more than $7 premium to where Belmond shares closed Thursday on the New York Stock Exchange.

Belmond's enterprise value, including debt, would be about $3.2 billion, said people familiar with the offer.

The Paris-based luxury-goods company, which owns fashion brands like Fendi and Louis Vuitton and champagne maker Dom Perignon, would be a surprise winner in a highly competitive sales process. For weeks, Middle Eastern and Asian government funds, big hotel brands and private-equity firms have dominated the bidding, say people familiar with the process.

But LVMH now looks poised to prevail, and announcement could come as early as Friday, these people said. The French company's shares closed at EUR255.85, up EUR1.50, or 0.59%, on Thursday in Paris.

A Belmond sale would be the latest sign that luxury travel is booming after an extended downturn, when many leisure travelers and businesses shunned paying up for high-end accommodations.

The hospitality company has full or partial stakes in virtually all of its 36 hotels, making it one of the last hotel operators to own most of the properties its manages. The hotels include Cipriani in Venice, the Grand Hotel Europe in St. Petersburg, Russia, and the Copacabana in Rio de Janeiro.

After years of spurning all takeover offers, the Belmond board announced in August that it had initiated a strategic review that effectively put the company up for sale. Belmond's share price has soared more than 50% since the announcement.

Founded as Orient-Express Hotels, the business became a stand-alone company in 2000 and changed its name to Belmond in 2014. It also offers luxury train rides, including the Venice Simplon-Orient-Express, river cruises in Europe and Asia, and owns the venerable 21 Club restaurant in New York City.

For LVMH, an acquisition of Belmond would expand its reach in the luxury world and greatly increase its position in the hospitality business. The luxury-goods company owns the Bulgari hotel brand and Chevel Blanc, a collection of luxury properties.

Write to Craig Karmin at craig.karmin@wsj.com

(END) Dow Jones Newswires

December 13, 2018 19:24 ET (00:24 GMT)

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