Saudi sovereign fund is said to seek 15% stake in Accor’s unit

22/02/2018 05:39 AST

Saudi Arabia’s sovereign wealth fund is in talks to buy a 15 per cent stake in Accor SA’s property business in a transaction that could value the unit at about €6.2 billion (Dh2.7 billion, $7.64 billion), according to people familiar with the matter.

Public Investment Fund, known as PIF, is buying a stake alongside Singapore’s state-owned GIC Pte, French asset manager Amundi SA and US real estate investment trust Colony NorthStar Inc, the people said, asking not to be identified as the information is private. The group jointly aims to buy a majority stake in the AccorInvest business, though it wasn’t immediately clear how much PIF’s partners would each hold, they said.

While discussions are in advanced stages, there’s no guarantee that an agreement will be reached, the people said. Representatives for PIF, GIC and Amundi declined to comment. Spokesmen for Colony NorthStar couldn’t immediately be reached outside US business hours.

“Discussions are ongoing with tier-one French and international investors,” Accor said in a statement on Wednesday while reporting 2017 earnings. “They are now in their final stages.” A spokesman for the company declined to comment further.

UK property magazine Estates Gazette reported last year that Accor was in talks to sell the unit to the consortium. The hotel chain will remain the largest shareholder in a deal, which is likely to be announced by the end of February, the Financial Times reported this month.

Accor, Europe’s biggest hotel operator, is selling some assets in developed markets as it seeks to expand in emerging economies and acquire new brands.

PIF seeks to become the world’s largest sovereign fund as the Saudi kingdom diversifies its economy away from oil under a plan known as Vision 2030. The sale of about 5 per cent in Saudi Arabian Oil Co is expected to provide more funds for PIF’s investments. Last year, the investment vehicle hired the head of Qatar Investment Authority’s real estate arm, Greg Bankhurst, as chief development officer, people with knowledge of the matter said at the time.

Gulf News