Eurazeo makes final exit from Accor

Jade Favre
08 March 2018

Tweet
Facebook
LinkedIn
Google plus
Send to

French private equity house Eurazeo has sold its entire remaining stake of 4.2% in hotel group Accor.

The 12,185,303 shares Eurazeo sold at €45.28 per share are worth €552m in total. The placement was made with institutional investors through an accelerated book-building.

Eurazeo's cash inflows from the sale amount to €535m after taxes and costs relating to the transaction. The firm made a gross multiple of 2x its initial investment in May 2008, including the sale of Endenred in 2013.

Previous funding
Colony Capital invested €1bn in Paris-listed Accor in 2005. Colony's investment consisted of a €500m issue of notes convertible into equity in three years and €500m in 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 in 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 of 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.

Colony fully exited the asset in early 2017.

Company
Accor is a global hotel operator founded in 1967 when Paul Dubrule and Gérard Pélisson opened their first Novotel hotel. The brand now owns 4,300 hotels in 100 countries.

The company has 250,000 employees and its headquarters are in Paris, France. Accor posted revenues of €5.6bn in 2016.

People
Eurazeo – Patrick Sayer (CEO).
Accor – Sébastien Bazin (chairman, CEO).