Developer First Sponsor Group plans to acquire hotel group Queens Bilderberg (Nederland) for €171.4 million (S$270.2 million).
The firm owns16 hotels totalling 1,633 rooms across the Netherlands and one leased outlet with 62 rooms. The portfolio also includes 13,661 sq m of conference space and 49 food and beverage operations, including two Michelin-starred restaurants.
The hotels had an average occupancy of 62.5 per cent and an average room rate of €95.10 in the 2016 financial year.
First Sponsor chief executive Neo Teck Pheng said: "This envisaged acquisition will catapult the group to become one of the largest hotel owners in the Netherlands.
"The Bilderberg portfolio has an established profit track record from as far back as 2001 which would provide further diversification to our recurrent income base, thereby strengthening our business resilience." Under the proposed acquisition structure, First Sponsor will end up holding 95 per cent of the shares of Queens Bilderberg, while Galaren Interholding will take the remaining 5 per cent.
Galaren is a member of Event Hotel Group of Germany, which has various ownership interests in 59 hotels across Europe it manages, including 11 in the Netherlands that it co-owns with a private equity fund.
The seller of Queens Bilderberg is an investment holding company whose majority shareholder is controlled by affiliates of Goldman Sachs Group and funds and accounts managed or advised by KKR & Co.
The Bilderberg portfolio will be acquired at a historical 2016 net yield of 6.5 per cent after transaction costs. It has undergone capital expenditure of €36 million in total for the last four years. In addition, certain hotels have been identified to have redevelopment potential, including increasing room count, to optimise their earnings capacity, said First Sponsor. It added that 15 out of the 17 hotels are freehold and perpetual leasehold in tenure, in line with the group's long-term strategy for capital appreciation.