Cliveden, the company that owns the luxury Buckinghamshire country house hotel of the same name, has bought the Draycott, a 25-bedroom hotel in Cadogan Gardens, central London.
Cliveden managing director John Tham also revealed he was in "advanced discussions" to purchase another central London hotel, which is believed to have about 100 bedrooms.
Following this second acquisition, expected to be finalised by the end of January, the company would seek a stock market flotation, added Mr Tham. "It will probably be a full listing that should value us at just under £30m. It should go ahead in the early part of next year," he said.
Almost £1m is being spent on refurbishing the Draycott, scheduled to be completed next spring. It will then be renamed Cliveden Townhouse. "Cliveden has a well-established reputation and we want guests to see the townhouse as their London home," said Mr Tham.
He would not reveal how much was paid for the property, but said the vendor was the bank that had been the effective owner of the hotel for the past three years.
Michael Holiday, who has been butler at Cliveden for the past 10 years, replaces Sue Gregory as general manager at the Draycott. A new head of housekeeping, Carol Rawlings, and head of reception have also joined the hotel from Cliveden.
Cliveden's sister hotel in Prague is on course for completion by the end of 1996, but Mr Tham's plans to buy Brocket Hall in Hertfordshire have been dropped.
Mr Tham and his partner in Cliveden, John Lewis, also own the Fenja, a 12-bedroom London townhouse hotel in the same square as the Draycott, through a company called Grovecastle. It is unaffected by Cliveden's plans.