Colony Capital’s sale of the Singapore Raffles hotel, which was announced at the beginning of May for a reported $650 million, has been cancelled, according to the parties involved.
Details of the sale were announced on May 8 by Raffles, some three years after the chain was acquired by Tom Barrack’s Colony for $1.2 billion. However, spokespeople for both Colony and the purchaser – a consortium led by former Credit Suisse banker Mark Pawley – have confirmed the deal is off.
A spokesperson for Pawley told the Singapore Times said that the buying consortium was “very disappointed” in the outcome. “This would have involved an assured distinct identity for Raffles Hotel as a flagship for Singapore in the international hospitality industry and a rejuvenation of the hotel,” the spokesperson said. The individual members of the consortium had never been revealed, but the main participant is thought to be a wealthy European family office.
Neither party would reveal why the deal had been called off, but the spokesperson strongly denied it was due to funding difficulties.
At the reported price of $650 million, the sale would have been a 3x profit for Colony, with the hotel accounting for $200 million of the $1.2 billion it paid for the entire chain in 2005. That result would have been a strong endorsement of the hospitality sector in South East Asia. The deal included a stipulation that Colony-owned Raffles Hotels and Resorts would continue to manage the hotel. Analysts are speculating that it may have been this stipulation that soured the deal.