South Korea's Hotel Lotte Co. plans IPO

Palace

South Korea's Hotel Lotte Co. is planning a share sale worth up to $4.85 billion next month in what would be one of the biggest initial public offering of the year so far.

Last year, Lotte Group, South Korea's fifth-largest conglomerate, said that it would list Hotel Lotte as part of efforts to simplify its ownership structure amid what reports call "a family feud over leadership succession." Shin Dong-bin, the youngest son of 93-year-old founder Shin Kyuk-ho and CEO of the companies that are Hotel Lotte's main shareholders, took control of the group in August with the support of shareholders in a key Japan-based holding company. Older brother Shin Dong-joo is engaged in legal proceedings seeking to wrest control. The feud prompted criticism of Lotte's shareholding structure, triggering a reorganization including the IPO.

The listing would headline a strong year for South Korean IPOs, fueled by a rise in the share market and as conglomerates that dominate Asia's fourth-largest economy restructure. Preliminary plans call for shareholders to sell about 13.65 million shares, or a 10-percent post-listing stake, while 34.2 million new shares, a 25-percent stake, would be issued at an indicative price range of 97,000 won to 120,000 won per share.

Virtual Roundtable

Post COVID-19: The New Guest Experience

Join Hotel Management’s Elaine Simon for our latest roundtable—Post COVID-19: The New Guest Experience. The experts on the panel will share how to inspire guest confidence that hotels are safe and clean and how to win back guest business.

A group spokesperson said that Hotel Lotte would use its IPO proceeds to expand its global business, including hotels, with acquisitions a possibility. Last year, Hotel Lotte paid $805 million for the New York Palace hotel. Lotte’s deal was “the largest single American asset purchase by a [South] Korean company,” according to Hodges Ward Elliott, which handled the deal for Lotte. The company, which owns 18 hotels in five countries, including Russia and Vietnam, then changed the name of the hotel to the Lotte New York Palace.

Source: Reuters

Suggested Articles

Nearly four years after it opened, the Four Points by Sheraton Havana will lose its license to operate.

A study from Optii Solutions examines the average cost of cleaning a guestroom to new sanitation standards.

The management company added the InfoGenesis POS solution as well as rGuest Buy Guest Kiosk, rGuest Buy OnDemand and Agilysys Authorize.