ACCOR HOTELS takes majority stake in SBE ENTERTAINMENT GROUP

AccorHotels agreed to acquire 50% of the common equity of sbe Entertainment Group from Cain International, with founder Sam Nazarian keeping the other half. The two parties signed a letter of intent and entered exclusive negotiations. Accor committed $125 million for the shares and a further $194 million in a new preferred debt instrument used to redeem all existing preferred units, part of them also held by Cain International, taking its total investment to $319 million. Completion was expected by 31 July 2018, subject to regulatory approvals. sbe was to continue as an independent luxury lifestyle operator, led by Nazarian as founder and chief executive with his management team, and to keep its headquarters in New York. Its hotels were to be distributed through the Accor platform, listed on its website and included in its loyalty programme. At the time of the agreement, sbe was set to operate 25 hotels with 7,498 rooms by the end of 2018, mostly in North America, alongside 170 restaurants and entertainment venues, and employed more than 7,000 people. Its pipeline covered a further 20 hotels and residences and 59 standalone restaurants and venues, and it had sold 1,500 branded residential units with more than 2,500 others in development. For sbe, the investment opened access to Accor’s international network, with expansion targeted at the Middle East, Latin America and Europe, and projects under way in Dubai, Rio de Janeiro, Mexico City, Cancun, Tokyo and Los Cabos alongside Atlanta, Chicago and Washington. For Accor, the stake strengthened its position in gateway North American cities including Los Angeles, Miami, Las Vegas and New York, and gave it a younger customer base. Cain International had become a shareholder in 2016, funding the expansion of sbe’s hotel assets, and had backed its purchase of Morgans Hotel Group the same year alongside The Yucaipa Companies.