InterContinental Hotels Group announces that it has agreed to acquire a 51% stake in Regent Hotels and Resorts for $39 million in cash (31.5M€) and will acquire the remaining 49% in a phased manner from 2026.
IHG is to acquire a 51% interest (paid in three tranches of $13 million – 10.5M€ – from 2018 to 2024) in a joint venture with Formosa International Hotels Corporation to acquire the Regent Hotels and Resorts brand and associated management contracts. IHG has the option to acquire the remaining stake via a combination of put and call options, which would probably result in a payment of less than $100 million (80M€).
IHG will bring Regent into its brand portfolio at the top end of the luxury segment and will accelerate its growth globally. IHG’s intention is to grow the brand from six hotels (1 962 rooms) to over 40 hotels (10 000 rooms).
The acquisition of Regent is part of one of IHG’s new strategic initiatives focused on continuing to expand its footprint in the fast-growing $60 billion luxury segment. This initiative is supported by the creation of a new dedicated division and will be funded by IHG’s efficiency programme.
IHG also announces that following an extensive refurbishment due to commence in early 2020, InterContinental Hong Kong will become a Regent Hotel (early 2021).
Keith Barr, Chief Executive Officer of IHG, commented: “We see a real opportunity to unlock Regent’s enormous potential and accelerate its growth globally. In addition, by creating a dedicated luxury division, we will be bringing together some of the most experienced and respected people in the industry who will help drive our luxury offer, ensuring that our existing luxury brands continue to evolve and allowing us to bring in new brands such as Regent to enhance our brand portfolio.”
Steven Pan, Executive Chairman of Formosa International Hotels Corporation commented: “The brand has an unrivalled heritage at the very top end of the luxury segment and the flagship Regent Hong Kong was consistently voted the world's best hotel in the 1980's and 1990's. Returning the property to its original roots as a Regent hotel is symbolic of our ambition to return the brand to its former glory and will go down in history as one of the greatest brand comebacks in the hotel industry […]”
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