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Our Bureau

Group's second US property will function as Taj Boston from January 11

Mumbai , Nov. 10

Indian Hotels Company Ltd (IHCL), owner of the Taj Group of hotels, on Friday agreed to buy the Ritz-Carlton hotel in Boston for $170 million (Rs 765 crore), concluding a transaction for which it had signed a letter of intent recently.

Taj Hotels Resorts and Palaces has signed a share purchase agreement with Millennium Partners, owners of the Boston hotel, IHC said in a notice to the stock exchanges.

Taj Hotels will take over management of the hotel on January 11, 2007 when the property will be renamed the Taj Boston, the company said in a release.

The equity component of the deal will be financed from the company's unutilised FCCB proceeds, Taj Hotels had said at the time of announcement of its half-yearly results for the current fiscal.

The 273-room hotel, set up in 1927, is located on Arlington Street near Boston's Public Gardens.

It is the oldest Ritz-Carlton hotel in continuous operation in the US.

The Taj Boston becomes the company's second hotel property in the US.

In 2005, Taj Hotels entered into a 30-year management contract agreement to operate and manage the Pierre on New York's Fifth Avenue.

The lease price is $5 million a year.

The Indian Hotels scrip rose 1.24 per cent on Friday on the BSE to close at Rs 150.45.

A hotel industry analyst said that as far the market was concerned, it was already a more-or-less done deal.

Mr Pratik Dalal, an equity analyst for Emkay Shares and Stocks, said that the Ritz-Carlton is a good buy for Taj Hotels.

"It is definitely a good move because the management wants to turn Taj into a global brand," he said.

"As far as the valuation of the hotel is concerned, it is hard to say because financials are not out right now. But it is definitely one step forward from a management perspective."

The Ritz-Carlton has already stopped accepting reservations for arrivals after January 11, while Taj Hotels has said that it will honour all existing bookings for hotel rooms and restaurants.

Mr Raymond Bickson, Managing Director and CEO of IHC, said that the Ritz-Carlton is one of the finest New England hotels and a premier social address in Boston.

"The addition of this hotel to the Taj group's growing international portfolio reiterates our commitment to establishing a significant presence for the Taj Hotels Resorts and Palaces brand in key destinations across the globe," he said in a release.

Mr David M. Gibbons, who was most recently General Manager of Swissôtel The Drake on Park Avenue in New York, has been named General Manager of the Taj Boston.

Mr Gibbons also served as General Manager of the Swissôtel Boston from 1992 to 2003.

"I think Taj Boston is going to be a very nice fit for this city and region, and I'm thrilled to be on board."

Global Advisors, a New York-based firm, advised Taj Hotels on the transaction.

The Taj group operates 75 high-end hotels in India and other locations around the world.

Its portfolio encompasses luxury and business hotels, top-end leisure resorts and authentic palaces.

The Ritz-Carlton was restored and refurbished in 2002 by Millennium Partners at a cost of $50 million.

Millennium Partners bought the Boston Ritz-Carlton from Marriott International in 1999.

They continue to operate the Ritz-Carlton Hotel and Towers in Boston Common.

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