Will a French budget chain go to a Chinese operator?

Chinese hotel operator GreenTree Inns is reportedly preparing to bid for an 80-percent stake in French budget hotel chain B&B, part of the U.S.-based private equity giant Carlyle. The chain is said to be seeking €950 million-€1 billion, around double the €480 million it paid French-listed investment group Eurazeo in 2010 for the group.

In July, Carlyle had Morgan Stanley look into a sale or stock market listing of B&B, which has grown significantly over the last decade. Ten years ago, B&B operated only around 100 hotels, but it now has 326 in France, Germany, Italy, Poland, Portugal, Czech Republic and Morocco and also plans to open in Brazil. French private equity firm Montefiore holds 15 percent of the business

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According to Property Investor Europe, GreenTree may face competition from private equity firm PAI Partners and Goldman Sachs' private equity arm. On the other hand, GreenTree may be willing to offer a higher price because of potential synergies and its less-demanding return targets. 

GreenTree was founded in 2004 by entrepreneur Alex Xu, still its CEO, and operates around 1,400 hotels in Asia. 

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