AccorHotels strengthens luxury hotels portfolio with Banyan Tree deal

Banyan Tree Holdings

08/12/2016 10:41

* Accor to buy 5 pct stake, option to buy another 5 pct 
    * Accor's initial investment in Banyan Tree worth $17 mln 
    * Latest luxury hotels deal, after FRHI, Onefinestay 
    * Accor shares down around 13 pct in 2016 
 
    By Dominique Vidalon 
    PARIS, Dec 8 (Reuters) - AccorHotels  ACCP.PA  has bought an 
initial five percent stake in Singapore's Banyan Tree Holdings 
 BANY.SI  as part of Accor's current strategy to strengthen its 
luxury hotels portfolio to give a boost to its earnings. 
    The move follows similar deals by AccorHotels, which is 
Europe's largest hotels group, in the luxury sector, such as its 
$2.7 billion acquisition of FRHI Holdings, which owns the 
Fairmont, Raffles, and Swissotel brands, and its takeover of UK 
serviced home rental company Onefinestay. urn:newsml:reuters.com:*:nL5N1780EL 
    AccorHotels will invest 24 million Singapore dollars ($17 
million) to buy a stake of 5 percent in Banyan Tree upon the 
conversion of a mandatory convertible bond. AccorHotels has the 
option to buy an additional stake of approximately 5 percent. 
    Luxury hotel operators can earn profit margins that are two 
to three times higher than those of budget hotels, and 
AccorHotels is hoping that expanding in this upmarket part of 
the industry will boost its profits, which have come under 
pressure due to security concerns impacting Europe.  urn:newsml:reuters.com:*:nL5N1CB1QA 
    "We are confident that our investment will create 
incremental value for our shareholders," said AccorHotels chief 
executive Sebastien Bazin in a statement, commenting on the 
Banyan Tree deal. 
    AccorHotels has more than 4,000 hotels, resorts and 
residences worldwide. Its luxury portfolio now comprises 
Raffles, Fairmont, and various Sofitel brands. 
    Banyan Tree Holdings has 43 hotels and resorts under the 
four brands of Banyan Tree, Angsana, Cassia and Dhawa, as well 
as 64 spas and three golf courses in 28 countries. 
    Accor shares were down 0.2 percent in early session trading. 
The stock is down by around 13 percent so far in 2016. 
    AccorHotels cut back the upper end of its 2016 profit target 
range in October after its French and Belgian operations were 
hit by security fears in the third quarter.  urn:newsml:reuters.com:*:nL8N1CO5PG 
    ($1 = 1.4158 Singapore dollars) 
 
 (Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta) 
 ((dominique.vidalon@thomsonreuters.com; +33149495432; Reuters 
Messaging: dominique.vidalon.reuters.com@reuters.net)) 
 
Keywords: ACCORHOTELS BANYANTREE/