AccorHotels Agrees to Sell Majority Stake in Property Business for €4.6bn

Date: February 2018; Updated May 2018

Location: Europe/Global. AccorInvest has a portfolio of 891 hotels across 27 countries, the majority of which are in Europe. Of the total, 324 are owned and 567 are operated under fixed or variable-rent leases.

Name: AccorInvest

Seller: AccorHotels – to sell 57.8% of AccorInvest. Accor Hotels still hold 42.2%

Buyer: Saudi Arabia’s Public Investment Fund (PIF), Singapore’s GIC, Credit Agricole Assurances, Colony NorthStar and Amundi, as well other investors.

Luxury and upscale hotels will continue to be operated by AccorHotels under 50-year contracts including a 15-year renewal option, while midscale and economy properties will be under contracts of an average of 30 years including a 10-year renewal option.

Sébastien Bazin, chairman and chief executive officer of AccorHotels, said: “These agreements represent a key milestone for the group. Following the separation of AccorInvest into a stand-alone legal entity last summer, we are now gathering a round-table of leading investors, on the basis of a valuation that fully reflects its global leadership and the quality of its assets, while building a long-term relationship between AccorHotels and AccorInvest.

“The entry of new shareholders and the deconsolidation of AccorInvest will provide AccorHotels with substantial leeway to enhance our dynamic growth and innovation strategy and create value for shareholders.”

Under the terms of the agreements, the investors made binding undertakings to carry out the transaction and AccorHotels granted them an exclusivity, pending a works council consultation. The transaction is also subject to certain antitrust and regulatory approvals. It will be submitted to a shareholder’s meeting of AccorHotels for consultation. It is expected to be finalised in the second quarter of 2018….and did so May 2018.

Following the closing of the transaction, AccorHotels intends to implement a share buyback program of up to €1.350bn or 10% of its share capital based on current market capitalisation over a two-year period.

Price: €4.6bn

THPT Comment: This takes the concept of Asset-Lite to another level…Accor Hotels now (2018) have 4,300 hotels in 100 countries, with 20 brands and reveneue of €5.6m (2016), as well as a host of related non-hotel business such as One Fine Stay

First Seen: Property Week