Accor sells stake in platform for $6.9 billion
European hotel chain Accor has sold a 55 per cent stake in the subsidiary that owns its hotels to some of the world’s biggest sovereign wealth funds and institutional investors for €4.4 billion ($A6.9 billion).
Investors in the group include Saudi Arabia's Public Investment Fund and Singapore's GIC alongside institutional investors like Credit Agricole Assurances, Colony NorthStar, Amundi and others.
The sale comes ahead of Accor’s proposed $1.2 billion takeover of ASX-listed Mantra Group and gives the French company, which includes the Pullman, Raffles, Novotel and Mercure brands, the resources to expand.
The stake is in Acccor’s hotel investment platform AccorInvest which comprises 891 owned or leased hotels including 24 hotels in Australia. These range from economy to midscale.
The platform includes a portfolio of 15 Ibis and Ibis Budget hotels which Accor had snapped up from the Abu Dhabi Investment Authority for $200 million in December 2016.
Accor will continue to manage the hotels in the fund on long term agreements of 30 to 50 years whilst delivering investors partners a five per cent dividend yield.
AccorHotels chief executive Sebastien Bazin said the sale would help fund regional merger acquisitions like Mantra Group and the Brazil Hospitality Group.
It would also provide for a €1.35 billion share buyback and improve Accor’s balance sheet.
"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," Mr Bazin said in a statement.
"AccorInvest will take advantage of its new powerful shareholders' support, as well as a strengthened financial structure to execute its roadmap and continue to reinforce its portfolio of assets."
“These agreements represent a key milestone for the group. Following the separation of AccorInvest into a standalone 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,"
Leon Getler 1st March 2018.
