Three largest domestic owners of hotels in China have decided to make a partnership targeted on buying their rival – Shanghai Motel Management Co. The companies plan to team up a private entity to gather enough funds as the asking price for the Shanghai hotelier is high – US$1 billion.
Shanghai Motel is put up for sale by its main shareholder – Morgan Stanley. Shanghai Motel has very successful business in China, where it has over 266 accommodations under the Motel 168 brand. 108 hotels in China from the abovementioned 266 ones are operated according to the franchise agreement.
The main bidder on this hotelier is China Lodging Group Ltd. This firm is the parent company of the Hanting Hotels brand that is very popular in the country. China Lodging Group Ltd. is planning to couple with other two gigantic companies specializing on budget accommodations in China. These are Home Inns & Hotels Management Inc. and 7 Days Group Holdings.
In order to accumulate the asked billion, China Lodging has made collaboration with General Atlantic CHD Investments and Bain Capital LLC. The other two companies also start collaborations with Carlyle Group and Warburg Pincus LLC.