Accor to offload Orbis stake

Swissôtel Bucharest
Orbis signed an agreement to manage the Mercure Bucharest Unirii earlier this month. Photo credit: Accor

In line with its “asset-light” strategy, Accor has made "material progress" in the disposal process of Polish hotel operator Orbis’ real estate assets—and has announced plans to offload its 85.8 percent stake in the company.

In a statement, Accor said an "independent expert" recently calculated the gross asset value of Orbis' portfolio. Based on Orbis’ results at the end of 2018, the valuation came to €1.18 billion, not including the entity’s corporate overheads, which represent around €11 million per year.
Following Orbis’ decision to separate its hotel-services business (franchise agreements and management contracts) and its real estate assets, Accor agreed to key terms of the planned acquisition of Orbis' services business for 1.2 billion zlotys (€286 million).

Through the transaction, Accor will take over the franchise agreements and management contracts on Orbis' 136 hotels in Central Europe. In particular, this will allow the company to facilitate relationships with investor partners and simplify the disposal process for real estate assets by divesting its stake in Orbis, since the transaction will turn Orbis into a pure-play, asset-heavy model, according to Accor. The closing is expected for October 2019.

Accor has started the process of disposing of its controlling stake in Orbis’ share capital, and will be approaching potential investors to acquire the shares, the company noted, adding Accor will recognize Orbis’ real estate business as an asset held for sale, starting with the publication of its financial statements for first-half 2019. The company will issue pro forma financial statements for 2018 shortly to reflect these adjustments, it said.

“Over the last decade Orbis significantly increased its business, entered into new countries, developed its hotel portfolio by all operating modes, and became the regional leader," said Orbis President/CEO Gilles Clavie in a statement. "For the last 20 years, Orbis has been supported by Accor, our strategic partner and shareholder. By splitting [the two] businesses and signing a long-term management agreements we will be able to capitalize a value of the asset light part through its disposal to Accor. We will then focus all our attention on Orbis core business i.e. real estate operations, which is in its DNA. Once done, Orbis—a pure heavy asset player—with its portfolio of 72 owned hotels will be ready to start a new era of growth sharing the same strategy with a new shareholder.”