BIG MOVEMENT IN THE HOTELLERIE SECTOR !
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ACCOR , buys luxury hotel group FRHI for 2,9 billion US $ ....
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Accor , Europe's largest hotel group , bought FRHI Hotels & Resorts , owners of the Fairmont , Raffles and Swisshotels chains , for $ 2,9bn in cash and shares .
The deal gives the French company ownership of the Savoy in London , the Plaza in New York and the Raffles in Singapore , and makes it " one of the three leaders in the luxury hotel space "
according to Accor's CEO Sebastien Bazin .
It will also help Accor , which operates 3.800 hotels worldwide , grow its luxury portfolio in the US , from 8 to 50 hotels , and will add 28 more high-end hotels in Asia .
Analysts welcomed the strategic rationale for the deal , but questioned the price...
Accor will pay the Catar Investment Authority and Saudi Prince Alwaleed bin Talal's Kingdom Holdings $840m in cash and 46,7m new shares for the deal .
The two Middleastern investors will become major shareholders in Accor , owing 10.5% and 5.8% of the company respectively .
The price values FRHI at 13.8 times forecast earnings before interest , tax , depreciation and amortisation for 2016 after synergies are included .
But the valuation is closer to 20 times if synergies are stripped out .
" Portfolios of this quality rarely come to market and could explain why Accor is willing to pay the price it has ," said Ian Rennardson , an analyst at Jefferies .
BLOGGER'S COMMENT....
Afterall , huge expansions into travel & leisure industry , deserve a premium...
There is always a price to pay , playing big !
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