Mandarin Oriental shares surge 21pc as it receives potential buyers for Excelsior Hotel
Shares of Mandarin Oriental International surged more than 20 per cent on Friday after the company announced it has received proposals from potential purchasers to acquire its iconic Excelsior Hotel in Causeway Bay.
“These will form the basis for further consideration of the company’s strategic options. A further announcement will be made as required. No assumption should be made at this time regarding whether the property will or will not be sold,” according to the statement issued by the Singapore-listed hotel operator.
The company’s shares jumped 20.75 per cent to close at S$2.56 on Friday.
The hotel operator said in June that it was undertaking a review of its long-term strategic options with regard to the Excelsior. As part of that review the company said it would test market interest in the possible sale of the property.
It is believed suitors for the four-star hotel include Sun Hung Kai Properties, Hysan Development and a joint venture between Chinese Estates Holdings and China Evergrande Group.
The 848-room hotel is likely to be valued at between HK$24 billion and HK$34.2 billion (US$4.38 billion), or between HK$35,000 and up to HK$50,000 per square foot, with a total gross floor area of 684,000 square feet (63,545 square metres).
A spokesman from the Mandarin Oriental declined to comment of how many bidders it has received on the property.
In 2015, Excelsior Hotel, a wholly owned subsidiary of Mandarin Oriental International, secured approval from the Buildings Department to convert the hotel into a 26-storey commercial building over a four-storey basement at 281 Gloucester Road.
The plan would yield a total gross floor area of 684,005 sq ft if Mandarin Oriental goes ahead with the redevelopment.
Built on Plot 1, the first land parcel sold after Hong Kong became a British colony in 1841, the site was originally a warehouse of the British conglomerate Jardine Matheson, located on Gloucester Road across the Royal Hong Kong Yacht Club, around the corner from Victoria Park.
A four-star hotel, the Excelsior opened in 1973, and is best known to local residents and tourists for its history as part of Hong Kong’s colonial past.
It was the favourite spot of Hong Kong’s high society, including the late Sir Run Run Shaw, founder and former chairman of the city’s premier broadcast television network TVB.