This adds 281 Hotels in 81 Cities to Portfolio
Home Inns & Hotels Management Inc. announced on May 27 that it has entered into a definitive agreement to acquire 100% ownership interest in Motel 168 International Holdings Limited ("Motel 168") for a total of US$470 million with approximately US$305 million in cash, and 8.15 million Home Inns' ordinary shares at a price equivalent to a per-ADS price of US$40.37 (each Nasdaq traded Home Inns' ADS represents two ordinary shares) to be issued at the time of closing (the "Transaction"). Home Inns will grant customary registration rights to the sellers in connection with the Home Inns ordinary shares issuance.Home Inns has retained Credit Suisse and J.P. Morgan to act as its financial advisors, Simpson Thacher & Bartlett LLP, Maples and Calder, Fangda Partners and Shanghai Pudong Law Office as its legal counsels, and PricewaterhouseCoopers as the accounting transactional service advisor for this Transaction. Motel 168 has retained Goldman Sachs, Morgan Stanley and Deutsche Bank as its financial advisors, and Skadden, Arps, Slate, Meagher & Flom LLP as its legal counsel.Motel 168 is one of the major branded economy hotel operators with 144 leased-and-operated locations and 137 franchised-and-managed hotels, with a total of 45,669 rooms in 81 cities across China as of today. The majority of Motel 168's portfolio is operated under the flagship Motel 168 brand, which is well-known among domestic business and leisure travelers, particularly in Shanghai and the eastern coastal regions. A selected number of locations are operated or co-operated under Motel 168's Motel 268 and Yotel QQ brands. Motel 168 generated gross revenue of $262 million in the financial year ending December 31, 2010.The Transaction represents a unique strategic combination of the portfolios of Home Inns and Motel 168, and will create the most geographically diverse economy hotel operation in China. Consistent with Home Inns' strategy of developing multi-brands, Motel 168 will provide an attractive and complementary brand portfolio for Home Inns to increase its scale and expand its scope.Home Inns plans to retain and operate the Motel 168 brand and leverage its proven operational expertise to enhance existing Motel 168 hotels' performance, as well as to further develop and expand the Motel 168 hotel portfolio. Home Inns does not expect this Transaction to cause any deviation from its existing business development and operational plans for the Home Inns or Yitel brands.Home Inns intends to finance the cash portion of the transaction through balance sheet cash on hand and one or more sources of new debt financing. Home Inns has received a term credit facility financing commitment for up to $300 million from Credit Suisse and J.P. Morgan.The Transaction has been approved by the Boards of Directors of Home Inns and Motel 168, and Motel 168's shareholders, and is expected to close, subject to customary closing conditions and Chinese regulatory approvals, in the fourth quarter of 2011.Home Inns has retained Credit Suisse and J.P. Morgan to act as its financial advisors, Simpson Thacher & Bartlett LLP, Maples and Calder, Fangda Partners and Shanghai Pudong Law Office as its legal counsels, and PricewaterhouseCoopers as the accounting transactional service advisor for this Transaction. Motel 168 has retained Goldman Sachs, Morgan Stanley and Deutsche Bank as its financial advisors, and Skadden, Arps, Slate, Meagher & Flom LLP as its legal counsel.
