AccorHotels to Turn HotelInvest Property Group into Separate Subsidiary
PHOTO: Novotel Lombok in Indonesia. (Photo courtesy of AccorHotels).
Amid winning shareholder approval to complete a $2.9 billion acquisition of FRHI Hotels & Resorts, Europe's largest hotel group, AccorHotels has revealed plans to turn its property business HotelInvest into a subsidiary, Reuters reported.
The move is expected to be completed by the end of the first half of 2017, according to chairman and CEO Sebastien Bazin, who told Reuters the shift would help accelerate the company's growth.
Bazin anticipates as many as a dozen French and international institutional investors to show interest in HotelInvest.
Reuters reported the company has its sights set on a valuation of at least $7.75 billion.
READ MORE: AccorHotels Completes Acquisition of FRHI
Restructuring efforts on HotelInvest began three years ago and have increased its value notably, climbing from $6.1 billion in 2013 to $7.8 billion in 2015. Operating margin also improved from 4 percent in 2013 to 7.8 percent in 2015.
"By making it possible to bring in new investors for part of our business, this project will significantly increase the resources available to the group to consolidate the respective leadership positions of HotelServices and HotelInvest, while also enabling us to continue to leverage synergies between the two business lines," Bazin said in the statement. "This way, each business will be able to continue to grow within the group based on a valuation that reflects its specific business model and growth outlook."
"At the same time, all of our teams will remain under the AccorHotels umbrella brand."
AccorHotels is expected to reveal additional details this upcoming fall.
For more Hotel & Resort News
More by Patrick Clarke
Get Travel Deals and Travel News
Recent Travel Opinions