SHANGHAI Home Inns & Hotels Management Inc. has acquired 100% ownership interest in Motel 168 International Holdings Ltd. for a total of US$470 million.
The purchase of China’s fourth largest hotel operator by its second largest hotel operator puts the combined company in position to leapfrog domestic standard-bearer Jin Jiang International Hotels and will place it in or near the top 10 largest hotel companies in the world by number of guestrooms, with approximately 140,000. The company will have more than 1,120 hotels covering about 170 cities after the acquisition.
Home Inns is paying US$305 million in cash and will issue 8.15 million shares at US$20.19 to cover the cost of the acquisition, which is expected to close later this year pending regulatory approval.
Home Inns plans to retain and operate the Motel 168 brand and will further develop and expand the brand hotel portfolio. Home Inns does not expect the transaction to cause any deviation from its existing business development and operational plans for the Home Inns or Yitel brands.
“We are excited to have the opportunity to bring Motel 168—a well-established domestic economy hotel chain—into Home Inns’ portfolio, and look forward to working with the Motel 168 management team to ensure timely closing of the transaction, smooth post-closing integration, and future growth of the business,” says Home Inns CEO David Sun. “We are confident that through this transaction, we will create long-term value for our shareholders, who will include funds managed by Morgan Stanley Real Estate Investing and other previous shareholders of Motel 168.”