Accor Agrees to $467 Million Sale Leaseback of 48 Hotels in Europe

Reuters - August 23, 2010

French hotel company Accor (ACCP.PA) agreed to sell 48 hotels in Europe for 367 million euros ($466.7 million) as part of its mission to cut debt and secure growth over the next few years.

The deal, which is due to be completed before the end of this year, will give Accor a cash boost of 282 million euros and will add around 3 million euros to its annual pretax profit from 2010, the hotel group said in a statement on Monday.

The hotels include a Novotel at Munich Airport and a 772-room Ibis at Charles de Gaulle Airport in Paris. The two buyers are insurer Predica, part of Credit Agricole (CAGR.PA), and property group Fonciere des Murs (FERP.PA), a subsidiary of Fonciere des Regions (FDR.PA).

Taken together with previous announcements, the deal means Accor has secured a year-to-date positive cash impact of just over 500 million euros from asset sales, above its current full-year target of 450 million. [ID:nLDE64D0LI]

An Accor spokesman was unavailable for comment. The firm said it would continue to manage the 48 hotels under a 12-year variable lease, renewable six times. Average annual rent will be 19 percent of the hotels' revenue, with a minimum guarantee for 2011 and 2012 of 23 million euros (an initial annual yield of approximately 6.25%).

Accor is eyeing asset sales through 2013 of around 2 billion euros to help fund growth after spinning off its cash-rich services unit Edenred (EDEN.PA) earlier this year.

It is aiming for the world No. 3 spot by 2015 and wants to be Europe's largest franchisor. It is currently world No. 4 after InterContinental (IHG.L), Marriott (MAR.N) and the Hilton and Starwood (HOT.N) chains. Sphere: Related Content