South Korean asset manager Mirae Asset Global Investments has been sued over a $5.8bn deal to buy 15 US hotels from China’s Anbang Insurance Group after missing a deadline for the deal’s closing, reported Reuters quoting a Mirae spokesman.
“We have no problem at all with raising money for the acquisition,” a Mirae Asset source said.
“We have been in discussions with Anbang about detailed conditions, including the timeframe for closing the deal, as market conditions have changed substantially in the aftermath of the COVID-19.”
Before Anbang filed the lawsuit in a US court, Mirae had claimed that the payment deadline was extended under an agreement with the state-controlled Chinese insurer. The deal was originally due to be closed by 17 April but has been delayed.
A Mirae spokesman also told Reuters that certain conditions had not been met by the seller. He declined to give details of the conditions and said the Mirae consortium is still pursuing the deal and coordinating with the seller.
Pulse News reported Mirae as saying that it notified the seller of the contractual problems on 17 April and its right to terminate the deal if the issue was not solved within 15 days. It is waiting for Anbang to respond by the 2 May deadline, it added.
Mirae placed a 10% deposit or $580m after winning the bid for the 15-hotel portfolio. The Strategic Hotels portfolio includes the Westin St Francis in San Francisco, the JW Marriott Essex House in New York, the Fairmont Scottsdale Princess, and Ritz-Carlton and Four Seasons hotels.
Mirae said it requested information about Anbang’s ongoing legal dispute with a third party over the hotel ownership but has yet to receive a reply. The lawsuit has led a US title insurance firm to exclude the disputed hotels from the US hotel portfolio coverage, which is in violation of the original contract with Mirae for Anbang to hand over full ownership, said a source familiar with the matter.