Sep. 15, 2002 -  The world-famous Raffles Hotel, where the gin sling cocktail was invented, is up for sale. Its owner, Singapore-listed Raffles Holdings, is to be put on the market by CapitaLand, its controlling 60 percent shareholder. 

Corporate financiers in London say CapitaLand has invited prospective buyers to approach it with informal offers for its stake in one of the world's most prestigious hotel franchises. 

A mandatory general offer for Raffles would be triggered by acquiring CapitaLand's stake. Raffles is one of Singapore's oldest hotels, founded in 1887 and named after Sir Thomas Stamford Raffles, the British governor who founded the port. It is renowned for inventing the Singapore Sling, served in its exclusive Long Bar. 

Raffles Holdings has a market value of around S$875 million (UKpound 315 million). CapitaLand has yet to start a formal auction, but the hotel business is likely to draw wide interest from trade and financial buyers. 

One banker said: "CapitaLand is taking soundings for its Raffles stake. We've been approached with the proposal and I'm sure others have too. It's a top franchise and is bound to attract a huge array of interest." 

Raffles Holdings owns a total of 38 hotels worldwide under the Raffles and Swissotel brands. It acquired Swissotel last year in a deal worth S$439 million (UKpound 163 million) from Swiss aviation business SAirGroup. 

The sale of Raffles Holdings is likely to attract interest worldwide, including Britain's three major hotel chains -- Six Continents, Hilton Group and Millennium & Copthorne (M&C). The property will be of particular interest to Hilton, which has recently been focusing on the Asian region: M&C and Six Continents already have a strong presence there. The move to sell the hotel follows a slump in first-half profits by Raffles Holdings, from S$349 million (UKpound 129 million) to S$17 million (UKpound 6.3 million). While much of this is accounted for by the inclusion of an exceptional gain from the disposal of one of its properties last year, the group also saw a heavy fall in operational profit. 

It said trading had been much worse in the wake of the 11 September attacks. 

Raffles Holdings is planning to expand in Japan. Group president Jennie Chua has announced plans to double the number of rooms it services worldwide to 25,000 by 2005. 

--By Robert Bailhache and James Daley 

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