Bermuda's two Princess hotels have been bought by Canada's largest hotel owner as part of a $540 million deal.

The Southampton Princess and the Princess in Hamilton are part of a seven hotel deal between Princess Hotels' present owners, Lonrho Plc, and Canadian Pacific Ltd.'s subsidiary Canadian Pacific Hotels (CPH).

CPH vice-president for public affairs and communications Ann Layton said: "We at Canadian Pacific Hotels are particularly delighted to be entering into the Bermuda tourism industry with the acquisition of The Princess and the Southampton Princess properties.

"We feel the service cultures of the two hotel companies are a perfect fit, and are honoured that such prestigious properties will now operate under the Canadian Pacific Hotels flag.'' The $540 million purchase includes about $71 million of assumed debt and is subject to certain adjustments and a number of approvals including Lonrho shareholder approval.

A meeting with shareholders is expected to be held in July, 1998, and it is anticipated that the transaction will close shortly thereafter.

Regional vice president of Princess Hotels, Bermuda, Stephen Barker, confirmed the sale yesterday.

"Based on Canadian Pacific's excellent reputation and proven track record in managing fine, upscale resort properties, I view this development as being extremely positive for Bermuda and for the employees of both the Hamilton and Southampton Princess Hotels.'' CPH chairman and chief executive officer William Fatt said: "We expect to strengthen the performance of both the existing Canadian Pacific Hotels portfolio and Princess Hotels by realising significant synergies from our expanded network and by increasing sales and marketing coverage in key markets.'' Canadian Pacific's involvement in the hospitality business dates back to the last century and includes such properties as Banff Springs, Quebec City's The Chateau Frontenac, Ottawa's The Chateau Laurier and Toronto's The Royal York.

It has over 21,000 rooms across Canada and the new purchase involves more than 3,000 rooms between the two Bermudian hotels, the Scottsdale Princess, Acapulco Princess, Pierre Marques, Royal Pavilion and Glitter Bay properties.

Princess also owns and operates a casino and hotel in the Bahamas but these are not included in the purchase.

Canadian Pacific chairman, president and chief executive officer David P.

O'Brien said: "The Princess resorts fit well with our existing Canadian Pacific Hotels resort properties, adding a warm-weather dimension and geographical diversification to our portfolio of first class prestige properties.

"This acquisition will position Canadian Pacific Hotels as a major player in the North American resort market with 18 destination resort hotels with more than 8,000 rooms and will serve as a platform for further growth.'' Calgary-based Canadian Pacific is active in energy, transportation and hotels.

Its group of companies includes PanCanadian Petroleum, Fording, Canadian Pacific Railway, Canadian Pacific Ships (CPS) and CPH.

The hotel company operates under two distinct brands, CPH and Delta Hotels.

Last year CPH represented eight percent of Canadian Pacific's total operating income.

Ms Layton noted: "We now look forward to expanding the Canadian Pacific presence in Bermuda to include the travel and tourism sector, through Canadian Pacific Hotels.'' "The announcement caps off an active six months at Canadian Pacific Hotels in which we purchased two Sheraton Hotels in Toronto, announced additional resort development of our existing network and acquired Delta Hotels,'' added Mr.

O'Brien.

Canadian Pacific is no stranger to Bermuda as the Island is the focal point for CPS's offshore shipping structure.

Bermuda now provides the head office for the majority of CPS's container service.

Steven Barker