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NYC's Plaza Hotel sold for $675M
Millennium & Copthorne sells Fifth Avenue landmark, citing soft returns.
August 13, 2004: 10:46 AM EDT

New York's famed Plaza Hotel.  
New York's famed Plaza Hotel.

LONDON (Reuters) - British firm Millennium & Copthorne said Friday it sold New York's Plaza Hotel for $675 million, bidding farewell to one of Fifth Avenue's most fabled addresses.

The 97-year-old hotel has hosted many of the world's celebrities, including Hollywood stars Michael Douglas and Catherine Zeta-Jones, who held a wedding reception there.

It has also been the setting for many famous movie scenes, and the focal point of a whole film -- "Plaza Suite" -- written by Neil Simon.

However, the hotel's returns were not good enough for Millennium & Copthorne (M&C), which runs over 90 hotels across the world and is 52 percent owned by Singapore-based property firm City Developments Ltd.

"Compared with the recent earnings generated by the hotel, the sale price is an attractive exit earnings multiple," Chairman Kwek Leng Beng said in a statement.

The transaction will see Plaza Operating Partners, in which M&C has a 50 percent stake, sell the Plaza and the adjoining property for $675 million.

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The sale is to U.S. property firm El Ad Properties NY LLC, and M&C will use the proceeds to help cut debt.

Seymour Pierce analyst Paul Leyland kept a "sell" rating on M&C, arguing that the company was currently overvalued, but added that the disposal was a sensible move.

"They're redressing their balance sheet without giving away much cash-flow," he said.

The Plaza, which occupies a French Renaissance building near Central Park, has a history of glamour.

"Nothing unimportant ever happens at the Plaza," is a popular saying associated with the hotel, whose former owners include tycoon Donald Trump.

Movies shot at the hotel include Hitchcock classic "North by Northwest" as well as "The Great Gatsby" and "Crocodile Dundee."  Top of page

Copyright 2004 Reuters All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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