Alwaleed’s Kingdom, Ashkenazy sue owner of Plaza Hotel over $600m sale

A planned $600m sale of New York’s historic Plaza Hotel appears in jeopardy after minority investors including Saudi billionaire Prince Alwaleed’s Kingdom Holding sued the property’s majority owner.

Bloomberg reports that Kingdom and Ashkenazy Acquisition filed a legal complaint in New York state court on Friday against the Plaza’s 70 per cent owner Sahara accusing it of reneging on a deal that gives them the right to match any offer on the property.

The two companies exercised the right of first refusal earlier this month after the founder of Dubai-based family office White City Ventures, Shahal Khan, and New York landlord Hakim Organisation’s Kamran Hakim said they had reached an agreement to buy the hotel.

The two said they hoped to complete the sale by June 25 and even talked of plans for a wider Plaza hotel brand with other properties across the world.

The president of Sahara US, which is an entity tied to Sahara India Pariwar, said it disagreed with the Friday accusations and would file a response in court.

Kingdom and Ashkenazy own 12.5 per cent of the plaza each and said in their court complaint that Khan and Hakim had been soliciting finance for the purchase with Sahara’s knowledge, interfering with their own ability to seek funding.

Sources told Bloomberg that Ashkenazy is willing and able to fund an acquisition if Kingdom is unable to contribute amid concerns Prince Alwaleed’s firm may not have access to capital after he was detained in Saudi Arabia’s corruption crackdown last year.

In an interview in March, the billionaire denied being tortured during his detention at Riyadh’s Ritz Carlton hotel but said he had reached a settlement deal with the government in exchange for his release.

Read: Saudi’s Alwaleed denies torture, confirms government deal after detention

The Plaza Hotel, on the southeast corner of Central Park, has a storied history after first opening 111 years ago.

It has featured in films including Home Alone 2 and was previously owned by US President Donald Trump, who sold it for $325m to a group led by Alwaleed in 1995 as part of a bankruptcy deal.

Under previous owner Elad Group part of the property was converted into condominiums while the hotel portion is managed by Fairmont Hotels, which became a unit of France’s Accor under a $2.9bn deal in 2016.

That arrangement also saw Alwaleed’s Kingdom Holding become a shareholder in Accor having previously owned part of the Fairmont, Raffles and Swissôtel brands under a holding company.

Kingdom and Ashkenazy have asked the judge to compel Sahara to sell them the property and execute an agreement for the same sale terms as the initial deal.

They also asked for a court order declaring Sahara’s demands for a second deposit unnecessary.

Alwaleed’s Kingdom Holding has sold off a number of hospitality assets in recent months including stakes in Four Seasons hotels in Beirut and Damascus.

Read: Alwaleed sells Damascus hotel stake to Assad-linked businessman – report

Last month it reached a deal with partners to sell Movenpick Hotels and Resorts to Accor for $567m.

Read: Movenpick Hotels and Resorts to its associate firm AccorHotels