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Bloomberg
Accor SA plans to buy back as much as 1.35 billion euros ($1.65 billion) of shares over the next two years after the hotel operator agreed to sell a majority stake in its property business.
Saudi Arabia’s Public Investment Fund, Singapore’s GIC Pte sovereign-wealth fund, Credit Agricole Assurances, Amundi SA, Colony NorthStar Inc. and other investors joined forces to purchase an initial 55 percent stake in AccorInvest, according to a statement from the French company. Accor will receive 4.4 billion euros ($5.4 billion) in cash from the deal and plans to pursue regional acquisitions and the buyback.
“Investors will now focus on the asset-light growth story of the group, which we view as one of the most interesting in the lodging space,†Raymond James analyst Simon Lechipre said. Lechipre, who has an outperform rating on the stock, said the proceeds from the sale of the property-unit stake are slightly higher than expected.
Hotel firms have been selling off real estate to focus on operating lodgings and franchising. Accor, Europe’s biggest hotel operator, is selling assets to help fund an expansion in emerging economies. In October, the Paris-based company offered to buy Australia’s Mantra Group Ltd. in a deal that valued the hotel and resort operator at $936 million. Accor is interested in doing more regional acquisitions, according to an investor presentation about the latest transaction.
The deal puts an enterprise value
on the property unit of 6.25 billion euros. The transaction will give the French hotel company “substantial leeway†to grow more and create value for shareholders, CEO Sebastien Bazin said. Accor will sell down its
remaining stake in AccorInvest to
30 percent initially.