"A good deal that follows on logically from what we have done in the hotel sector".

4 min reading time

Published on 22/02/24 - Updated on 22/02/24

Covivio Hotels

Covivio, a major player in the European property market, has strengthened its position in the hotel sector by acquiring Generali's 8.3% stake in Covivio Hotels in exchange for new Covivio shares. This transaction, equivalent to the acquisition of 500 million euros of assets and a strengthening of equity capital of almost 300 million euros, represents a decisive step in Covivio's development in the hotel sector, a fast-growing market. Following this operation, Covivio will hold 52.2% of the capital of its subsidiary Covivio Hotels and will launch a public bond exchange offer for the remainder of the capital.

Tugdual Millet CEO, Covivio Hotels: "Above all, this is a confirmation, rather than a novelty, of the Group's interest in pursuing its growth in the hotel sector and continuing to increase its exposure in the hotel sector. It's a great deal and a logical extension of everything we've been doing in the hotel sector for years now.

Covivio is thus strengthening its position in European hotel property. Covivio has been present in this sector since 2005 through its subsidiary Covivio Hotels. This limited partnership, which is listed on Euronext Paris, is 43.9% owned by Covivio and 53.5% by long-term institutional investors, including Crédit Agricole Assurances, BNP Paribas Cardif, Generali, Assurances du Crédit Mutuel, Sogecap and CDC.

The transaction, expected to be completed by the end of April, will give Covivio a majority stake in Covivio Hotels, consolidating its position in the European hotel sector. A simplified mandatory exchange offer will be made for the remaining shares in Covivio Hotels, on the basis of 31 Covivio shares for every 100 Covivio Hotels shares.

Tugdual Millet CEO, Covivio Hotels: "The history of Covivio Hotels is primarily one of portfolio growth. In recent years, we have been lucky enough to acquire portfolios that are now the strength of Covivio Hotels, particularly in Spain, the UK, Germany and Italy.

We are very focused on our asset management to revitalise our hotel portfolio. This will be a major part of our business until 2025.

The acquisition of Generali's stake will enable Covivio to balance its portfolio between offices, housing and hotels. With this acquisition, the share of hotels in Covivio's portfolio will rise to 20%, compared with 17% at the end of 2023. It will be virtually neutral in terms of NAV and accretive to recurring earnings per share. Covivio's debt indicators will also be improved, with an LTV ratio of 34% and a Net Debt/EBITDA ratio of 8.5x for Covivio Hotels.

Tugdual Millet CEO, Covivio Hotels: "In hotel property, we are coming to the end of the adjustment cycle, which gives us better visibility. We'll be able to reposition ourselves better for investment. I don't see this happening in the very short term, but it could happen in 2024 or 2025. We want to continue to increase our exposure to the hotel sector. We will remain in the markets that we know, that we master and that are the most liquid, i.e. Europe. Our priority objective is to increase our exposure in Southern Europe.

Covivio

Covivio

Investor / Finance

  • Covivio France
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