Up to 300 hotel staff will be laid off by the end of the year following approval of the HK$1.25 billion privatisation of Grand Hotel Holdings by minority shareholders in the Hang Lung Group and Hang Lung Properties. At an extraordinary general meeting yesterday, shareholders of both companies approved the plan under which Hang Lung Properties would acquire parent Hang Lung Group's stake in Grand Hotel for HK$924.4 million. It will make a general offer to Grand Hotel's minority shareholders next week. Under the plan, Hang Lung Properties will spend HK$70 million to turn Grand Tower Hotel in Mongkok into offices and HK$10 million to convert Grand Plaza Hotel in Quarry Bay into serviced apartments. Hang Lung Properties' executive director Terry Ng Sze-yuen said half the hotels' staff would lose their jobs and the company was setting aside HK$12 million as compensation. 'Staff affected will get compensation. On top of that, we will pay them an extra one to six months' salary according to seniority.' Hang Lung Group holds 74.09 per cent of the A shares and 69.61 per cent of the B shares in Grand Hotel Holdings. It also owns 61.06 per cent of Hang Lung Properties. The offer for Grand Hotel is pitched at HK$1.84 per A share and 18.4 HK cents per B share. It represents a 25.1 per cent discount to net asset value, estimated at HK$2.46 per A share and 24.6 cents per B share. Mr Ng said they were expecting a 7 per cent return from the two hotels. Both hotels would continue with their operations until December 31 and Hang Lung Properties would help employees find new jobs by holding a recruitment day next month. Conversion of the hotels will begin on January 1 and take six to nine months to complete. The Mongkok office tower will be put up for lease at the end of this year. Although rents of prime office buildings had dropped 10 to 20 per cent recently, Mr Ng said there was steady demand for offices in Mongkok.