Hong Kong-backed Bluesky buys major Canadian REIT

(Picture of the Fairmont Royal York Hotel exterior)

InnVest Real Estate Investment Trust, which has a portfolio of 109 hotels in Canada, said Wednesday it would be sold to a Canadian company backed by Hong Kong money for 2.1 billion Canadian dollars, or about $1.6 billion, including debt, it was reported.

InnVest’s hotels include properties managed by Marriott International, Fairmont Hotels & Resorts, Hilton Canada and Hyatt Hotels Corporation.

Bluesky will pay 7.25 Canadian dollars for each unit of InnVest. That is a 37-percent premium over the average trading price over the 30 days ending May 10.

“We are pleased to have arrived at an agreement with Bluesky that offers InnVest unit holders an opportunity to receive a significant premium over the trading price of their units,” Edward Pitoniak, the chairman of InnVest, said in a joint news release. “This transaction was the result of an intense period of deliberation by the board, and lengthy, constructive negotiations with Bluesky.”

Drew Coles, the president and chief executive of InnVest, said the transaction was “a winning outcome for all stakeholders,” noting that Bluesky’s plans for the portfolio were aligned with InnVest’s. Mr. Coles will continue in his position, and the headquarters for the REIT will remain in Toronto.

This hotel deal follows some high-profile acquisitions of hotels by the Chinese insurance group Anbang, which bought Strategic Hotels and Resorts in a deal worth $6.5 billion, but walked away from a $14 billion bid for the Starwood hotel chain.

Bluesky, a private company, is described in the news release as being interested in developing a diverse portfolio of hotels, hospitality services and real estate. The release quoted Li Chen, the Bluesky president and chief executive, as saying, “We are impressed with InnVest’s hotel assets and its management team. This transaction is an investment that will establish a global platform from which Bluesky will continue to pursue growth opportunities in North America.”

Source: The New York Times