Entertainer Merv Griffin's wholly owned investment company said Monday that it has agreed to purchase the 592-room Beverly Hilton Hotel from its owner, a joint venture of Prudential Insurance and Hilton Hotels, for an undisclosed price.
Industry experts said it is possible that Griffin, through the Griffin Co., paid more than the reported $200 million it cost the Sultan of Brunei to acquire the much smaller, but posher, Beverly Hills Hotel last month.
In a statement released through his public relations firm, Griffin hinted that he would be a hands-on owner if the sale, which is subject to review by both parties, is completed.
"Owning a hotel embodies all the things related to the entertainment business--the big showroom, meeting the public, singing with the bands," the one-time big band singer and television talk-show host said. "My ultimate dream has always been to own a great hotel--and in such a magnificent community as Beverly Hills, where visitors from all over the world are royally entertained."
Spokesmen for Prudential and Hilton Hotels had no comment on the purported agreement.
Griffin--ranked by Forbes magazine as one of the 400 richest people in America, with an estimated net worth of $300 million--said last month that he had been outbid for the 32-year-old hotel by a Japanese consortium. No information was available Monday about how the entertainer had regained the upper hand.
Griffin also acknowledged last month that he had been interested in buying the 260-room Beverly Hills Hotel until the Southeast Asian potentate made his record-shattering $200-million offer.
Hotel industry and real estate experts had widely divergent estimates of the value of the Beverly Hilton, which sits on 8.9 acres of choice Beverly Hills real estate at Wilshire and Santa Monica boulevards and recently underwent a $35-million renovation.
Fred Sands, owner of one of the largest real estate companies on the Westside, said $300 million would be within reason. "It's prime, prime property," Sands said. "You can't get any better."
Max Baril, owner of the Beverly Pavilion and Beverly Rodeo hotels, put the value of the Beverly Hilton at $200 million to $250 million.
But Saul F. Leonard, a partner with Laventhol & Horwath, the big accounting firm that specializes in leisure industries, said there is no chance that the Beverly Hilton would sell for more than the Beverly Hills Hotel.
"It may be a good hotel, but it's not unique like the Beverly Hills," Leonard said.
Whatever the price, Sands said Griffin's acquisition is more likely than the Sultan's to be a profit-motivated purchase.
"I'm assuming Merv is not going to look at something the same way the Sultan would," Sands said. "He's hoping to get a return. The Sultan bought like somebody who goes in and buys a sweater in a department store."
Hilton Hotels Corp., based in Beverly Hills, will continue to manage the hotel, according to the statement from Griffin. That arrangement would reflect a continuing trend among the largest hotel companies to reduce their hotel holdings but expand their management operations.
"You own a property for 20 years, you depreciate the property, and eventually it's time to take those dollars and do other things with them," Baril explained.
The Beverly Hilton would become the third major Beverly Hills hotel to change hands in the last two years. Besides the Beverly Hills, the Beverly Wilshire was sold for $125 million in November, 1985, to Hong Kong-based Regent International Hotels.