Accor SA (EPA:AC) announced today that it expects to proceed with the plan to demerge its two core businesses, Hotels and Services, into two separately listed companies, without any capital ties between them. According to the report, employee representatives have already responded to the demerger plan, which will be submitted to shareholders for approval at an Extraordinary Shareholders Meeting on June 29, 2010.
Currently Accor is the market leader in Hotels and Services, with over 150,000 employees operating in over 100 countries. Between 2003 and 2009, issue volume and revenue grew respectively an average 10.5% and 12.3% and operating cash flow by 15.1%. According to Barclays Capital research, Accor results of PTP EUR338m are 7% ahead the expected EUR422m - ‘quite a significant out performance against expectations of over 10% in H2’. Better margins within hotels and general stabilization of hotel occupancy are offered as an explanation.
Accor Chief Executive Gilles Pelisson said on a conference call Wednesday that both businesses had reached critical mass. The company anticipate attracting a larger amount of investors with this demerger, where both arms of the company will have their own business model, “With their own operating, marketing and sales and legal structures, the two businesses will be able to independently drive their own growth” the announcement said.
Specifcally the board expect the demerger will enable each business to leverage the particular skills and expertise to operate in their differinig business environments. Each business will have their own corporate mission project, fronted by their own management teams. Marketing for each will be enhanced by targeting specific investors in that environment, and providing them with increased visibility at all levels. The division of the businesses also opens up each independent company to new partnership and alliance potential in their field.
In terms of tax, Accor SA will retain the Hotels business, as well as Lenôtre, Compagnie des Wagon-Lits and its stake in Groupe Lucien Barrière, while a new company will be created for the Services business. All of the Services subsidiaries shares will be contributed to the new company, and all shares in the new company will be attributed to the Accor Hotels shareholders. The report confirmed that Shares in Accor SA (retaining the Hotels business) and the new Services company will be…
