Sale of Berlin’s Hotel Adlon falls through for now

The proposed sale of Berlin’s luxury Hotel Adlon has stalled after investors failed to reach the required capital majority.

Some 86% of the Adlon fund’s shareholders voted in favor, but they represented only 71.04% of the capital. The sale required approval from investors holding at least 75%.

Jagdfeld, which manages Fundus-Fonds 31, said it would continue pursuing the transaction. The fund owns the hotel and has about 4,000 investors, most of them private individuals. The company had sought a sale because many of those investors are now older and want to sell their holdings.

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overwhelming mandate

Jagdfeld described the vote as an “overwhelming mandate” to try again. It said, “Now is the right time for the company to sell. Only in this way can the often 80-year-old small investors from the first generation, who are helpless on their own because they lack alternatives, get what they are entitled to.”

Larger investors had opposed the sale in advance, particularly because of Jagdfeld’s performance fee. The company would receive, among other payments, 20% of any proceeds above a purchase price of 310 million euros. Jagdfeld had set 280 million euros as the minimum sale price. The next steps and a completion date remain open.

The hotel at Berlin’s Pariser Platz was founded by Lorenz Adlon almost 120 years ago. It burned down almost completely in 1945, was demolished in 1984 and rebuilt from its original plans in the 1990s. Kempinski operates the hotel today, and its lease runs through the end of 2032. A sale would not affect that agreement.

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Now is the right time for the company to sell. Only in this way can the often 80-year-old small investors from the first generation, who are helpless on their own because they lack alternatives, get what they are entitled to.