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AccorHotels to buy shares in sbe
Posted on Wednesday, 04 July 2018 07:08
AccorHotels is to purchase a 50.0 per cent stake in lifestyle hospitality company sbe Entertainment from Cain International.
The transaction is worth USD 125.00 million with the buyer adding USD 194.00 million in a new preferred debt instrument that takes the total investment to USD 319.00 million.
Sbe’s chief executive Sam Nazarian will continue to hold the remaining 50.0 per cent.
The deal is expected to be completed by 31st July 2018, but remains subject to regulatory approvals.
Formed in 2002, sbe claims to be a leading lifestyle hospitality company, specialising in luxury apartments and other services such as spas, dining and entertainment facilities.
Its brands include SLS, the Originals, the Rebury Hotels, alongside culinary and nightlife names including, Katsuya, Unami Burger and Nightingale Privilege.
Sbe has previously disposed of residential units for USD 2.00 billion and has upcoming projects worth a further USD 2.50 billion.
Nazarian said that the benefits of the deal will give the company a greater presence on the global market.
By gaining growth and access into international markets such as the Middle East, Asia and South America, the target will accumulate 25 hotels and 170 restaurants by the end of 2018.
Bernstein analyst Richard Clarke said in a note to investors that the deal is contrary to Accor’s intention of being asset light, as it involves cash from asset sales to fund more acquisitions.
Cited by Reuters, fund manager of Roche Brune Asset Management, Meriem Mokdad, also voiced concern that the buyer had not disclosed any strategy as to how sbe would increase its earnings.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 255 deals targeting hotels and motels providers, with the exception of casinos, announced worldwide since the beginning of 2018.
The largest of these is worth USD 5.36 billion and took the form of an acquisition of a 57.8 per cent stake in hotel operator AccorInvest by GIC Private Markets Private, Colony NorthStar and Ammundi Private Equity Funds, among others.
© Zephus Ltd