Billionaire Bernard Arnault has joined the chase to purchase a storied Venice hotel, one of the trophy assets put on the market in the messy fallout from the implosion of Rene Benko’s Signa Group.

The Hotel Bauer, located on the Grand Canal, was one of the crown jewels of the Austrian mogul’s real estate empire. Despite its prime location and a history dating to 1880, the sales process has been caught up in Signa’s complex creditor entanglements. 

King Street Capital Management is running the sales process, according to people familiar with the matter. Filings show that funds administered by the credit hedge fund took control of shares in a Signa company that owned Hotel Bauer in May.

The asset has attracted bids of more than €275 million ($294 million), said the people, who asked not to be identified as the information is private. The process is competitive and includes property firms and other investors, meaning there’s no guarantee that Arnault — the founder of LVMH Moët Hennessy Louis Vuitton SE — will get the nod, several people said.

King Street appointed real estate investment bank Eastdil Secured to find a buyer for the five-star hotel, said the people. Deliberations are ongoing and there’s no certainty they will result in a deal, according to the people. King Street declined to comment, as did a representative for Arnault.

Signa Prime Selection AG, the unit that owned the site, had agreed in April to sell three Italian properties, including Hotel Bauer, to the Schoeller Group, run by a German industrialist family of the same name. But a fund run by King Street has exercised rights to take control of the asset after the deal was announced.

Investment needed to reopen the 110-room hotel adds another complication for potential buyers. The site has been closed for a major renovation since 2022, and construction work stopped last year after Signa’s cash ran low.  

It’s unclear what role the Schoeller Group is playing in the ongoing bidding. Administrators of Signa Prime have been in negotiations with Schoeller for months over claims related to a €200 million loan they provided to unit in the months before it filed for insolvency. Signa Prime said it had reached a debt standstill with the group this month. 

A representative for Schoeller declined to immediately respond to Bloomberg questions. 

LMVH owns a string of high-end hotels and properties in the luxury hospitality sector, including the Hotel Cipriani in Venice. It’s not clear whether the bidding would be done via LVMH or Agache — one of Arnault’s holding companies — one of the people said.