Canadian hotel owner InnVest REIT has accepted a C$2.1 billion (US$1.6 billion) takeover bid from Hong Kong-backed Bluesky Hotels and Resorts.
Bluesky is offering C$7.25 (US$5.64) cash for each unit of InnVest’s shares, which represents a 33 per cent premium over the current C$5.47 (US$4.25) price point.
Fairmont Royal York Hotel
With this deal Bluesky would gain access to the 109 Canada-based hotels owned by InnVest, including the iconic Fairmont Royal York Hotel in Toronto. Most of InnVest’s hotels come via the company’s 50 per cent stake in Choice Hotels, which boast brands such as Comfort Inn, Delta, Travelodge, Best Western and Holiday Inn.
However, as each property is still owner run, this means that InnVest only has control of the individual hotels that it owns. If successful, Bluesky’s ownership would therefore be limited to InnVest's 109 Canadian hotels – and not other Choice Hotels around the world.
The deal is expected to close in a few months. Bluesky has placed a C$100 million (US$78 million) deposit, which gives it the power to match any superior offer that might come into play before closure.
The move is the latest in a series of major acquisitions in the hospitality industry. Marriott for instance looks set to take over Starwood (see here), while French hotel chain Accorhotels has bought FRHI (see here), the parent company of Fairmont, Swissotel and Raffles.
For more information, visit innvestreit.com