Reuters: Private Equity: UPDATE 1-Accor to sell Motel 6 to Blackstone for $1.9 bln

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UPDATE 1-Accor to sell Motel 6 to Blackstone for $1.9 bln May 22nd 2012, 06:51 Tue May 22, 2012 2:51am EDT * Accor to take 600 mln eur one-time non-cash charge * Deal to cut debt by 330 mln eur * Shares in Frankfurt up 3.8 pct PARIS, May 22 (Reuters) - Accor agreed to sell its troubled U.S. budget hotel business for $1.9 billion to private equity group Blackstone, part of an effort by the French hotel group to focus on growth outside the United States. Accor will take a one-time non-cash hit of 600 million euros ($766 million) linked to the early buyout of fixed-lease hotels as part of the deal, but said its net debt would be reduced by 330 million and its fixed-lease commitments by 525 million. "This deal will provide Accor with additional resources to address the tremendous growth potential in the Asia Pacific region, in Latin America and in Europe," Chief Executive Denis Hennequin said in a statement on Tuesday. The sale includes Accor's Motel 6 and Studio 6 chains and comprises 1,102 hotels in the U.S. and Canada. The business had revenue of 532 million euros last year, down from 555 million in 2010, and operating profit of 15 million against a 4 million year-earlier loss. Accor has been restructuring Motel 6 and shifting to an asset-light model where it no longer owns the hotel buildings. The company had signalled it was open to offers for the chain. The world's fourth-largest player behind InterContinental , Marriott and Starwood Hotels said it would keep its presence in the luxury and high-end market in the U.S. with its Sofitel and Novotel brands. Blackstone plans to invest "significant capital" in Motel 6 properties and "accelerate the expansion of the franchise base", Jonathan Gray, Blackstone's global real estate head, said in a joint statement, without giving details. The transaction is scheduled to be completed in October. Link this Share this Digg this Email Reprints

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