From Vanity Fair · Noah Shachtman · · 1m 30s
Khashoggi’s Billionaire Hotel Deal Stalls
Saudi billionaire Motasem Khashoggi’s $2 billion bid for New York’s Pierre Hotel faces delays after shareholders question his cash.
In brief
Saudi billionaire Motasem Khashoggi’s $2 billion bid for New York’s Pierre Hotel faces delays after shareholders question his cash. Khashoggi’s proposed purchase of New York’s Pierre Hotel stalled due to unverified funds and shareholder skepticism. Originally reported by Vanity Fair.
Khashoggi’s Cash Claim
Saudi businessman Motasem Khashoggi promised $2 billion for New York’s Pierre Hotel.
“He totally has the $2 billion, they swore.”
Initial Deposit Plan
Khashoggi’s team said $100 million deposit would flow immediately.
“A wire transfer instruction has been issued to transmit the $100,000,000.”
Deposit Delay
Three weeks later, the $100 million deposit hasn’t materialized.
“Exactly why, I don't know.”
Board Response
Co-op board canceled Khashoggi’s exclusivity and pushed vote to October.
“The co-op board has yanked the exclusivity they granted Khashoggi to seal the deal.”
High-Profile Buyers
Mark Zuckerberg, Michael Dell, and the King of Morocco all passed on the deal.
“A variety of high-profile figures including Mark Zuckerberg, Michael Dell and the King of Morocco were all approached to buy the Pierre.”
Building Challenges
The 41-story Pierre needs $182 million in repairs and upgrades.
“The 41-story building wasn’t just historic, it was old, and needed, at minimum, $182 million in repairs and upgrades.”
Khashoggi’s Background
Khashoggi’s family lost money in the 1980s after Adnan sold his yacht to Trump.
“Adnan, the arms dealer and great engine of the Khashoggi wealth, was even forced to sell his 242-foot yacht to Donald Trump.”
Corporate Report
A corporate report questioned Khashoggi’s ability to fund the $2 billion deal.
“The company’s registered capital of SAR 1,000,000 (approximately USD 266,00:00) does not align with the scale of the proposed Pierre Hotel transaction.”
Khashoggi’s Offer
Khashoggi initially offered $150 million, later raised to $2 billion.
“The initial offer was small, relatively speaking: $150 million, after expenses, for the hotel portion of the building.”
Shareholder Tensions
Shareholders sued the board for transparency after Khashoggi’s offer emerged.
“A group of shareholders, including Burch, Moonraker actress Lois Chiles, investor Austin Hearst, and philanthropist and animal-rights activist Tina Beriro, sued the board for more information.”
Khashoggi’s Email
Khashoggi emailed shareholders about his family’s connection to the hotel.
“I understand how personal this is. Growing up, my family stayed at the hotel whenever we visited New York.”
Eisner’s Move
Larry Ellison bought a place one block south of the Pierre.
“Eisner, who owns a pair of apartments at the Pierre and has openly fought with current management, just bought a place, just one block south on Fifth Avenue.”
What Happens Next
The Pierre’s sale remains uncertain as shareholders await Khashoggi’s funds.
“The co-op board has yanked the exclusivity they granted Khashoggi to seal the deal.”
The takeaway
Khashoggi’s proposed purchase of New York’s Pierre Hotel stalled due to unverified funds and shareholder skepticism.
