GIC, investors buy 55% stake in AccorInvest

Mr Sebastien Bazin, chairman and chief executive of French-based AccorHotels, said the deconsolidation of its property business arm, AccorInvest, will provide AccorHotels with substantial leeway to enhance its dynamic growth and innovation strategy.
Mr Sebastien Bazin, chairman and chief executive of French-based AccorHotels, said the deconsolidation of its property business arm, AccorInvest, will provide AccorHotels with substantial leeway to enhance its dynamic growth and innovation strategy.PHOTO: REUTERS

Majority stake to cost $7.1b; portfolio of hotels includes Raffles, Novotel brands

Sovereign wealth fund GIC and a group of international investors are buying a 55 per cent stake in AccorHotels' property business arm, AccorInvest.

AccorInvest has almost 30,000 employees and operations in 27 countries. Its portfolio of 891 hotels, most of them in Europe, includes luxury brands Raffles and Novotel and the budget Ibis brand.

GIC said in a statement yesterday that the investment will enable it to "gain exposure to AccorInvest's large and well-diversified portfolio, with resilient cash flows and attractive opportunities for value creation".

The sale of AccorInvest will result in a cash contribution of €4.4 billion (S$7.1 billion) for French-based AccorHotels.

The company announced in July 2016 that it intended to spin off and dispose of its real estate operations united under AccorInvest.

AccorHotels chairman and chief executive Sebastien Bazin said: "Following the separation of AccorInvest into a standalone legal entity last summer, we are now gathering a roundtable of leading investors.

"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."

AccorHotels recorded a full-year net profit of €441 million last year, a 66 per cent surge from a year earlier. It had a market cap of €13.6 billion as of Feb28.

The AccorInvest hotels will continue to be operated by AccorHotels under 50-year contracts (with a 15-year renewal option) for luxury hotels and 30-year ones on average (with a 10-year renewal option) for outlets in the mid-scale and economy segments, the group said.

The other investors alongside GIC include Saudi Arabia's sovereign fund, Credit Agricole Assurances, Colony NorthStar and Amundi.

GIC said the acquisition is subject to certain regulatory approvals and is expected to be finalised in the second quarter of this year.

A version of this article appeared in the print edition of The Straits Times on March 01, 2018, with the headline 'GIC, investors buy 55% stake in AccorInvest'. Print Edition | Subscribe