China hotelier Jin Jiang said to weigh boosting Accor Stake

BEIJING (BLOOMBERG) - Jin Jiang International (Holdings), which controls China's largest lodging company by market value, is considering increasing its stake in French hotelier Accor, people familiar with the matter said.

Jin Jiang, already Accor's biggest shareholder with an almost 12 per cent stake, could build up its ownership in the Paris-based company to about 20 per cent, the people said. The Shanghai-based company would be interested in gaining more influence over Accor's management, according to the people, who asked not to be identified because the deliberations are private. Accor shares jumped as much as 3.8 per cent in Paris trading, the most intraday in about a month.

An additional 8 per cent stake would be worth about 719 million euros (S$1.18 billion) at Accor's current share price, data compiled by Bloomberg show. Accor has hired its own advisers to guide managers on how to proceed, the people said.

"Jin Jiang is one of the fastest-growing Chinese companies in the hotel industry, and they've been looking to invest more outside of China," Wouter Geerts, a lodging analyst at Euromonitor International in London, said by phone Tuesday. "Now that more Chinese travelers are taking international trips, it's important for Jin Jiang to benefit from that."

Both companies have been part of the recent wave of consolidation in the hotel industry. Jin Jiang, which owns Shanghai's more than eight-decade-old Peace Hotel, has been building its stake in Accor in a bid to expand its global franchise after it bought Groupe du Louvre in 2014. Accor, Europe's biggest hotel operator, said last week it agreed to buy Onefinestay for 148 million euros to expand in the luxury serviced-home market.

Jin Jiang hasn't made a final decision, and it may opt to keep its current shareholding level, according to the people. A spokesman for Accor declined to comment, while representatives for Jin Jiang didn't answer several phone calls seeking comment Tuesday.

Chinese companies have announced US$97 billion (S$130 billion) of overseas deals in the first three months of the year, part of an unprecedented shopping spree that's already close to topping the total amount spent in either of the last two years, Bloomberg- compiled data show.