When they officially took control of the Savoy at 12.01am on Wednesday morning, representatives of Fairmont, the Canadian hotel group, Prince Alwaleed bin Talal and HBOS celebrated with a cocktail created especially for the occasion in the hotel's famous American Bar.
Dubbed the "Fairmont", the new drink apparently contains ingredients that relate to the Canadian, Saudi and Scottish origins of the three companies that have become the Savoy's third owner in 12 months.
The hotel was bought by Quinlan Private, the Irish investment fund, when it paid 750m for the Savoy Group of hotels, which includes Claridge's. On Wednesday the Savoy is believed to have fetched a price of between 200m and 230m.
Kingdom and Bank of Scotland Corporate, a division of HBOS, are providing the equity finance for the acquisition. They will invest an additional 30m in redeveloping parts of the hotel, particularly the Thames Foyer area and the River Restaurant, which overlooks the Thames.
Fairmont, the upmarket Canadian chain in which Prince Alwaleed owns a 5 per cent stake, will run the Savoy.
"This is a platform for us to do things in Europe," said John Johnston, Fairmont's executive vice president for Europe, Africa and the Middle East.
Originally conceived by Gilbert and Sullivan impresario Richard D'Oyly Carte as somewhere for audiences to stay after performances at his adjacent Savoy Theatre, the Savoy opened in 1889.
Although the property will become known as a "Fairmont Hotel" following the deal, worried long-term patrons need not worry about any change to the hotel's name or iconic sign. "In a place like this you have to preserve as much as you can," said Mr Johnston.
Fairmont has 44 hotels, predominantly in North America, where its hotels include the Plaza in New York.
However, it is making a push into Europe and has formed the FHR Hotel Fund, a three-way joint venture with Kingdom and Bank of Scotland.
The partners recently purchased the Monte Carlo Grand and have lodged a bid for the Paris InterContinental, which is being auctioned by InterContinental Hotels Group.
Mr Johnston said the joint venture, which has an investment fund of 800m and is being advised by Cedar Capital Partners, would target "all the main European gateway cities".
The three partners are believed to be interested particularly in acquiring a Scottish resort property. Gleneagles, the golf course and hotel development owned by Diageo, is not for sale but is believed to be admired by the partners.Matthew Garrahan
© Financial Times 2005
