AccorHotels to Sell $550M European Portfolio
- Jan 28, 2016
Paris—After the recent acquisition of three iconic brands worth $2.9 billion, AccorHotels just announced that it is negotiating a portfolio of 85 owned and leased European hotels, 61 of which are located in France. The asset package comprises one Pullman, 19 Novotel, 13 Mercure, 35 ibis, 3 ibis Styles and 14 ibis budget hotels.
The buyer is a newly created company, due to be up-and-running by mid-2016, its shares being split between Eurazeo (70 percent) and AccorHotels (30 percent). Moreover, the new management team will include current AccorHotels employees. A third—yet undisclosed—institutional partner is expected to join shortly.
Accor is selling the 28 hotels it owns plus all business interests of the whole package for approximately $159 million. The remaining 57 properties—currently owned by Foncière des Régions, Axa IM – Real Assets and Invesco—are covered by purchase agreements that include a substitution clause for the buyer. Thus, they will be acquired by the new entity directly for a total of approximately $390 million.
As the ownership structure changes, all properties will remain under economy and midscale AccorHotels brands. However, major developments are in the works for the 85 hotels, as the new owner will set up a renovation budget in excess of $100 million.
“This wide-reaching, innovative transaction is another key step in the transformation of HotelInvest. We are delighted to be contributing to the emergence of a major new hotel investor in the European market, which we intend to support over the long term. The deal will create value for AccorHotels, for all of the employees and entities involved in the transaction, and for the new entity, which will serve as a key partner for the Group going forward,” John Ozinga, COO of HotelInvest (Accor’s ownership and investment branch), said in prepared remarks.
Image courtesy of Jacques Yves Gucia via AccorHotels Group