A group of Irish investors, led by financier and deal-maker Mr Derek Quinlan, is to buy the prestigious Savoy hotel group in Britain for €1.13 billion, writes Barry O'Halloran

Mr Quinlan's company, Quinlan Private, announced yesterday that it has agreed to buy the chain, comprising the Savoy, Claridge's, Berkeley and Connaught hotels in central London, from its current owners, US investment houses Blackstone Group and Colony Capital.

The deal will be closed by the end of the first week in May, and the sale price will be £750 million (€1.13 billion).

Blackstone and Colony bought the group in 1998 for €786 million, and embarked on a refurbishment programme.

A number of un-named Irish investors are taking part in the deal with Quinlan Private. The consortium saw off competition from Saudi businessman Prince Alwaleed Bin Tala Alsaud, the world's fourth-richest man. Prince Alwaleed also has a 23 per cent stake in Four Seasons Hotels, the Canadian hotel operator, and a 17 per cent holding in Eurodisney.

There have been persistent rumours that the Savoy Group was on the block since last October, when Blackstone and Colony hired Deutsche Bank and Jones Lang LaSalle to sell Claridge's. It is understood that the US investment houses decided to sell the whole group when a number of parties expressed interest in buying all four hotels.

Property market analysts have been sceptical about the group's immediate future, as the hospitality industry has been suffering from the after-affects of the global economic downturn, the fallout from the US-British invasion of Iraq and terrorism fears.

However, yesterday Mr Peter Donnelly of Quinlan Private told The Irish Times that the Irish investors had bought the property at just the right time to exploit a pick-up in the luxury hotel market in London, which he said was driven by the improved global economic climate.

"We've already started to see a sustained recovery right across the luxury market," Mr Donnelly said.

"Demand has strengthened and occupancy rates were at between 85 per cent and 95 per cent in London during March."

Mr Donnelly signalled that Quinlan Private was unlikely to make any radical changes to the group's current management and strategy.

"We believe that Blackstone and Colony followed the right strategy when they bought the group in the late 1990s," he said.

"The hotels had lost some of their appeal, and they [Blackstone and Colony\] embarked on a refurbishment programme and re-positioned the hotels in the market, and brought in the chefs, Gordon Ramsey, Marcus Wearing and Angela Hartnett. That brought in a whole new group of customers," he said.

The group had successfully targeted younger and more upmarket customers and Quinlan intended to keep up this strategy.

It is both a real-estate and trading "play" for the company, he said, meaning the group hopes to benefit from both higher property values and an increased profitability.

The chain's chief executive, Ms Geraldine McKenna, from Omagh, Co Tyrone, oversaw the refurbishment and transformation of the business over the past five years, including a redesign of the famous Savoy Grill.

Quinlan Private has been in business since 1989. It also owns the Four Seasons hotels in Prague, Milan and Budapest. The company has a portfolio of 140 properties in Ireland, Europe and North America. It recently bought the DKNY building on Old Bond Street, London, for €33.5 million.

It also continues to be active in eastern Europe, and owns two high-profile commercial properties in the centre of Prague.