Colony Capital exits AccorHotels

Having first entered the group in 2005 through a €1bn investment, Colony was one of Accor's largest shareholders, with around 5% of shares and 10.4% of voting rights.

Eurazeo, which became co-investor in the group alongside Colony in 2005, still retains around 3.7% of the share capital through holdco Legendre Holding.

As a result of the transaction, Eurazeo and Colony's co-investment agreement has now been dissolved. The investors had been progressively divesting from the group since 2012. In 2015, they had sold close to 10% of Accor's total share capital.

During the two buyout firms' holding period, a decision was made in 2010 to refocus the Accor group on its hospitality offering and sell its services division, which was spun out as Edenred.

In 2013, Accor's CEO was ousted from the group and replaced by Sébastien Bazin, former managing director of Colony's European team.

In January 2017, Colony announced its merger with NorthStar, to create an asset manager with $58bn in assets under management.

Previous funding
In 2005, Colony invested €1bn in Paris-listed Accor. Colony's investment consisted of a €500m issue of notes convertible into equity in three years and €500m of five-year convertible bonds. As a result, the GP's stake amounted to around 10% by 2007. At the time, the US-based property investor had just sold its interest in London's Savoy, Claridge's, Connaught and Berkeley hotels. The hotels were reportedly sold for a combined £750m.

Eurazeo joined Colony as an investor in the group the same year. Eurazeo's total investment amounted to €489m, with €468m of acquisition debt. The GP took an 8.5% stake in the group at the time.

In 2008, the joint investors concluded a five-year shareholder agreement with the group to increase their respective stakes. Eurazeo intended to raise its stake to 10% and Colony to around 20%. The investment was to be financed by proceeds resulting from the cash settlement of the equity swap entered into in 2007.

In 2015, the two funds undertook to sell, through two separate sales, a total 9.65% of Accor's total share capital. Eurazeo sold around 11 million shares, representing 4.72%, while Colony sold around 11.5 million shares, representing 4.93%. Eurazeo reportedly made 2x returns through the sale of its stake. Net proceeds of the sale reportedly totalled €350m.

Company
AccorHotels, formerly known as Accor, is a French multinational hotel group listed on the CAC 40 index of the Paris bourse.

Headquartered in Paris, the group owns, operates and franchises 3,700 hotels across all inhabited continents, encompassing several brands, from budget to luxury hotels. It currently operates in 92 countries.

The group is a hotel operator and franchiser through HotelServices, and a hotel owner and investor through HotelInvest. Its brand portfolio includes Sofitel, Grand Mercure, Novotel and Ibis.

AccorHotels currently employs 180,000 staff in total, and reportedly had revenues of €5.58bn in 2015 with EBITDA of €1.78bn, according to investor Eurazeo. The company's origins date back to 1967, although the Accor name dates back to 1983. Accor became AccorHotels in 2010, as the group divested its services arm, Edenred.

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• Topics
• Exits
• France
• Consumer
• France
• Eurazeo