Accor, Europe's largest hotel group, may be adding a slew of hotels to its already multi-tiered portfolio. Reports are surfacing that Paris-based Accor is a frontrunner to acquire rival budget hotel operator Louvre Hotels, in a deal that could net owner Starwood Capital upwards of $1.9 billion.
"Accor is looking at the dossier but the process is at an early stage," Reuters quoted a source.
A potential deal is in line with what relatively new Accor CEO Sébastien Bazin said when he took over the reins of the company. Accordingly, in May, Accor reportedly acquired a portfolio of hotels in Germany, the Netherlands and Switzerland for about $1.23 billion. At the time of the deal, Bazin said, "These transactions send a strong signal of our capability to rapidly implement the strategy of restructuring the HotelInvest portfolio," which is Accor's business that focuses on hotel ownership and investment.
Reuters goes on to cite French daily Les Echos, which said that Starwood Capital was seeking buyers for Louvre Hotels and that Accor was among those that had submitted non-binding offers in a sale which could raise 1.2-1.5 billion euros ($1.5-1.9 billion)—or over 10 times gross operating profit of 110 million euros.
Other buyers reportedly include private equity groups PAI Partners, CVC, Blackstone Group and French property group Fonciere des Murs.
Starwood Capital acquired Louvre Hotels as part of its acquisition of Taittinger's hotel and champagne empire in 2005. Last November, it sold off 40 Louvre Hotel properties, a move made at the time to reduce debt and also finance more international expansion.
Louvre Hotels operates more than 1,000 hotels in 47 countries, ranging from one to five stars under the Premiere Classe, Campanile, Kyriad, Tulip Inn, Golden Tulip, Kyriad Prestige, and Royal Tulip brands.