For more than 150 years, princes and plutocrats, prime ministers, presidents and celebrities have crossed its famous threshold.
A suite - of the sort slept in over the years by everyone from Winston Churchill and the Aga Khan to Cary Grant, Bing Crosby, Audrey Hepburn, Mick Jagger, Jackie Onassis and Kate Moss - costs £7,000 a night.
Grandeur: Claridge's is one of the most opulent and impressive addresses in London
The Queen and Prince Philip celebrated their ruby wedding anniversary in the hotel, and Prince William dined there last year.
Little wonder that the Mayfair hotel’s management likes to joke that when people call the switchboard asking to speak to ‘The King’, they get the stock response: ‘Which one?’
Yet behind the gilded fittings and marble floors, an ugly feud is being played out between opposing clans of billionaires.
The row began in 2011 amid disagreement over an attempted takeover of the world-famous British institution. It has produced a tide of litigation in three countries, culminating in 11 court hearings, which have cost each of the warring parties an estimated £25 million in legal fees.
Luxurious: The lobby of the grand hotel. A suite within costs £7,000 a night
On one side of the dispute are Sir David and Sir Frederick Barclay, reclusive identical twins aged 79 who own London’s Ritz hotel and the Telegraph group of newspapers.
The brothers, who have made billions through property, live in a vast mock Gothic castle on the private Channel Island of Brecqhou.
On the other side is 58-year-old Irishman Patrick McKillen, who lives in a French chateau surrounded by pavilions by famous architects, including Frank Gehry and Norman Foster.
Dispute: Paddy McKillen, pictured outside the
High Court in 2012, where he was engaged in a legal dispute with the
Barclay Brothers
The conflict has involved everything from allegations of spying and corporate espionage to a petty dispute over an open-necked shirt. Court proceedings have been jollified with cameo appearances by the U2 singer Bono, fashion designer John Rocha, a selection of Arab financiers and monarchs and the former prime minister, Tony Blair.
Today, after three years of wrangling, tensions between the two warring factions have never been more strained or more acutely personal.
On one side, sources close to Mr McKillen claim the Barclays are attempting to bully him into giving up a valuable stake in Claridge’s that he insists is rightfully his.
On the other, those loyal to the Barclays say their Irish rival is no gutsy underdog. Instead, they allege he is being quietly ‘supported’ by Qatar’s ruling Al Thani family, who hope to gain ownership of London’s most famous hotel — to add to their many other prime assets in the capital.
The wealthy but controversial Qataris have certainly long coveted the trophy property. Indeed, back in 2011, Tony Blair, who has been paid million-pound fees to broker deals on behalf of Qatar’s Sovereign Wealth Fund, helped set up a deal that (had it come off) would have seen Claridge’s pass to them.
Almost the only thing both sides agree on is that its tone has become deeply, almost unbearably unpleasant. ‘This is no longer about mere business,’ one key participant told me this week.
‘It involves ego, pride and visceral levels of hatred. The battle for Claridge’s is arguably the most hostile takeover dispute in British corporate history.
‘The assets at stake are worth a billion pounds. And the legal fees are already in the tens of millions. It’s a soap opera, but an epic one.’
To understand how things have come to this, there is no better place to start than at the Mayfair hotel’s famous front door. Above it, the green, white and orange flag of Ireland was yesterday fluttering in the breeze.
It has been hanging there since 2004, when Mr McKillen joined a consortium of Irish property developers who bought Claridge’s, along with three other top London hotels, the Savoy, Berkeley and Connaught.
At the time, the deal was seen as a symbol of their country’s buoyant Celtic tiger economy. Indeed, the group christened the holding company that owned the properties Coroin, the Gaelic for ‘crown’.
For several years, the consortium and its hotels prospered. Indeed, in 2005 they made back £250 million of their £750 million investment by selling the Savoy to Prince Al-Waleed Bin Talal, a member of Saudi Arabia’s royal family.
Tensions: On the other side of the dispute are Sir David Barclay (left) and his twin brother Sir Frederick (right)
That deal was finalised on the prince’s yacht in the south of France, at a meeting McKillen attended with Bono, his friend and business partner. In 2008, however, the economic tide turned. With Irish fortunes in freefall, property values tumbled and many loans were called in.
The development left several of Coroin’s shareholders, who had financed their purchase of the hotels (and many other properties) with cheap credit, struggling to stay afloat and seeking to offload their assets.
Spotting an opportunity to acquire a landmark blue chip asset at a knockdown rate, the Barclay brothers began to circle the hotel group.
In 2011, they persuaded one of the original investors, Derek Quinlan - a former tax inspector who’d suffered the indignity of having his homes, yacht and art collection seized by bankers - to give them voting rights over his 35.4 per cent share in Coroin.
Months later, the brothers acquired a Cyprus-based holding company that owned 29 per cent of the company’s shares from another investor, Peter Green. This gave them effective control over 64.4 per cent of Coroin.
All of which left Mr McKillen, who owned the remaining 35.6 per cent - and had no interest in surrendering the hotels - deeply upset.
Convinced the Barclay brothers had violated a raft of shareholder agreements, he entered into a flurry of litigation, accusing them of conducting business in ‘a manner unfairly prejudicial to his interests’.
For their part, the Barclays vehemently denied any wrongdoing and defended themselves against the claims.
Close: Tony Blair and Sheik Hamad of the Qatari ruling family (pictured in 2003) discussed the sale of Claridge's
Costing £20 million, it was one of the most expensive legal disputes of the year. It was followed with fascination by the media because of the light it shone on the manner in which the protagonists did business.
At one point, the court heard Mr McKillen describe his first meeting with Frederick Barclay, at the Ritz Hotel in London.
‘He initially ignored me and instead asked the concierge why I had been allowed to enter the hotel without wearing a tie,’ said McKillen. ‘I felt he intended to cause me embarrassment. It was not a good way to start the meeting.’
At another point in his evidence, Mr McKillen claimed he had deleted hundreds of text messages from his phone because he was convinced it was being ‘hacked’ by parties close to the Barclay brothers.
However, he admitted he had no evidence to support the accusation, which the Barclays denied. A lawsuit he filed making similar accusations in the U.S. was quietly dropped last year.
Perhaps most intriguing of all was the light the case shed on the business dealings of Tony Blair.
During cross-examination that Mr McKillen attempted (unsuccessfully) to keep secret, it emerged that the former prime minister had acted as an ‘honest broker’ in an attempt to offload the hotels to the Al Thani family.
Mr McKillen said he’d first met Blair at the Davos business conference, where they had been introduced by the PR magnate Matthew Freud.
They had gone on to have a string of informal conversations over the future of Claridge’s and its sister properties, at which the idea of a potentially lucrative sale to the Qataris was floated.
Mr McKillen felt Mr Blair could help ‘smooth over’ difficulties during any negotiation. In late 2011, the ex-PM duly managed to ‘raise the issue’ of the proposed sale in a meeting with the then ruler of Qatar, Sheik Hamad.
Mr Blair has made millions of pounds from this brand of smooth corporate diplomacy since leaving political office - especially when it involved brokering deals for wealthy Middle Eastern leaders.
Pedigree: The hotel has been visited by all
manner of famous people - including the Queen and Maragret Thatcher,
pictured in 1995
The line of business is nothing if not controversial. Some critics say Blair is making himself hugely wealthy from contacts acquired while he was in office. Others complain he is supporting unethical regimes that do not have Britain’s best interests at heart.
Qatar is a case in point: an absolute monarchy that has been criticised for its treatment of migrant workers, it is controversially aligned with Egypt’s Muslim Brotherhood, and allows the Afghan Taliban to operate an office in its capital, Doha.
In 2011, the former prime minister had a sufficiently close relationship with the Al Thanis to set up a meeting in London between Sheik Hamad’s son, Sheik Jassim, and Mr McKillen over Claridge’s.
It resulted in an agreement for the Qataris to take a 50 per cent share in Claridge’s, provided Mr McKillen won the 2012 court case, which could have ended with him gaining the right to acquire the Barclays’ share in the hotels.
However, Mr McKillen’s court case against the Barclays failed. A further appeal failed late last year, leaving him facing tens of millions of pounds in legal bills.
By last week, he faced a further headache. A debt of £660 million he had secured against his shareholding in Coroin was about to be sold off by its owner, the Irish Bank Resolution Corporation.
Among the bidders were the Barclay brothers, who intended - if they managed to purchase the debt - to instantly call it in, a move likely to have forced Mr McKillen to surrender his shareholding.
That would have given the Barclays victory in the battle for Claridge’s.
However, at the last moment, the Irishman stumbled upon a saviour in the shape of Tom Barrack, a billionaire American financier who owns the Californian investment firm Colony Capital.
Mr Barrack agreed to purchase the debt and then entered into a ‘partnership’ with Mr McKillen.
When the deal was announced last week, Mr McKillen told reporters: ‘Today’s deal takes my stake in the hotels firmly out of the reach of the Barclay brothers.’
‘I will never sell to them, absolutely never - I think they will get that message now loud and clear. I am steadfast in my determination not to allow them to bully me.’
And Barrack declared: ‘Paddy McKillen is an esteemed real estate professional, a first-class partner and, above all, a superb human being.’
The deal, which came out of the blue, was a setback for the Barclays’ hopes of gaining control over the hotel. It could mean the dispute could endure for years to come.
Yet despite the lofty rhetoric, some wonder if the American financier’s dramatic entrance into the battle for Claridge’s is as straightforward as it may seem.
They point out that Mr Barrack, a friend of the actor Tom Cruise and a business partner of Hollywood star Rob Lowe, happens to have a long-standing business relationship with... Qatar’s Al Thani family.
In recent years, Barrack has struck a lucrative deal to sell hotels in Italy to Qatar’s Sovereign Wealth Fund, and has collaborated with them to buy the Hollywood film company Miramax from Disney.
So, are the Qataris behind his latest deal? A spokesman for Mr Barrack declined to comment.
Yet given the hugely wealthy Al Thani family’s interest in Claridge’s, not to mention the powerful figures at work on their behalf, only a fool would bet against them somehow pulling strings in the billion-pound battle for London’s grandest hotel.
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