The historic Caledonian Hotel in Edinburgh is to be sold for more than £50 million to a consortium of Israeli investors backed by the HBOS banking group, The Times has learnt.
The new owners, who are retaining Hilton Hotels Corporation to run the hotel under a long-term contract, are expected to invest up to £15 million in upgrading the facilities, although that is below most estimates of the amount required to restore it to its former glory.
The 251-room Caley, as it is known, was put up for sale by Hilton in October last year through CB Richard Ellis Hotels, the real estate advisers.
The American hotelier, which itself is on the verge of being acquired by Blackstone, the private equity firm, for $26 billion (£12.9 billion), has been selling assets to focus on operating and franchising hotels.
The Caley, which is overlooked by Edinburgh Castle, sits at the opposite end of Princes Street from the city's other grande dame, the Balmoral. The two hotels have been in competition since the early 1900s, when they were owned by rival railway companies. The Caledonian Railway Company developed a system in which steam from trains at the adjoining station was recycled to heat the hotel's water supply. The hotel was acquired by Hilton in 2000.