The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

While a $74 million deal to sell Nassau’s British Colonial Hilton is “very, very close” to being sealed, a senior tourism official yesterday confirmed that a bid for the still-closed South Ocean property had fallen through.

Noting that the British Colonial Hilton’s intended purchaser was also the South Ocean suitor, David Johnson, the Ministry of Tourism’s director-general, said the initial plan had been to sell them as a package to the same buyer.

“I know that a deal was practically reached, and understand it didn’t quite materialise recently,” Mr Johnson said of South Ocean.

“I understand that it was packaged with the one downtown, the Hilton, and that it got diverged. The Hilton has moved forward, but South Ocean has not.”

Tribune Business revealed exclusively this year how a $30 billion New York asset management firm, whose identity has not been disclosed, had made simultaneous offers to acquire both the British Colonial Hilton and South Ocean properties.

The British Colonial Hilton is jointly owned by the Canadian Commercial Workers Industry Pension Plan (CCWIPP), the pension provider for Canadian supermarket workers, and Adurion, the Swiss/UK boutique investment house and private equity player, while South Ocean is owned by CCWIPP outright with no partner.

Sources close to the transaction last night confirmed Mr Johnson’s version of events, noting that the New York asset manager had “made a pretty good offer to pick up South Ocean” that was rejected by CCWIPP.

The purchase price offered was in the $45 million range, and Tribune Business was told that the Canadian pension fund had instead altered course by hiring Australian professional golfer, Greg Norman’s, company to “package” the property and seek out a buyer.

Greg Norman Golf Course Design re-designed the South Ocean golf course several years ago, when CCWIPP had partnered with RHS Ventures and Plainfield Asset Management in an unsuccessful bid to re-open the resort - a venture that ultimately ended in a bitter New York legal battle.

“They’re [Greg Norman]trying to package it for an unknown buyer to come in,” one source said, adding that Greg Norman’s company was set to earn a $2 million fee if it was successful.

However, it was suggested that the Government, desperate to generate Bahamian jobs and economic activity, ay not be pleased with the latest developments.

One contact suggested it may not give Greg Norman the time it is seeking, and was likely to conduct a review of South Ocean to see what the best way forward was.

Tribune Business was previously told that in relation to South Ocean, which has effectively been closed for some six-seven years, CCWIPP had promised to get an appraisal, seek “a fair price and sell it”.

It had then pledged to respond to the Government by mid-end September, with the latter having warned that it “can’t commit” to the property’s casino licence, development rights and road re-routing unless some development takes place.

The news was brighter at the British Colonial Hilton, with the New York asset manager said to be keen on developing the real estate that lies immediately adjacent to the downtown Bay Street resort’s western flank.

That property has long been seen as ideal for an upscale condo, retail and office-type development, but previously mooted joint ventures to do just that have not met with success.

Yet a Tribune Business source said yesterday: “The Hilton deal is very, very close. I think it’s going to happen, probably before the end of the year.”

This newspaper previously reported that Adurion and CCWIPP were mulling over an offer that was close to meeting their target price and terms.

The two sides were said to only be a short distance apart on valuation. But, given the sometimes tense relationship between CCWIPP and Adurion, a deal is not certain until it is signed, sealed and delivered.

Prime Minister Perry Christie in September this year exclusively confirmed to Tribune Business the New York asset manager’s interest in the Hilton and South Ocean.

He said then: “I have met recently with the owners of the Hilton hotel, that is the pension fund and the Swiss developer. They have placed it for sale.

“I know they are receiving offers of some significance. The pension fund, in meetings with them last week, indicated that they were receiving offers for South Ocean. They are assessing those offers, and a part of those assessments is a new valuation of the property itself, so that they could really look in context at what is being offered.”

Mr Christie added: “They [CCWIPP] have assured me they taking steps rapidly to see to the sale and new investments in that area [South Ocean].

“They are flexible, meaning that they have before partnered with persons who were investors, and I think what they would want to do is to ensure that they get the maximum offer for the property from someone with the capacity to develop it. I am aware that a major equity fund has made a significant offer.”