Is Accor ripe for a takeover?
Economic buoyancy and quicker-than-expected returns from the division of the company into hotel operations and ownership segments are keeping French hotel giant Accor on an upward trajectory.
This performance is also keeping it on the radar of potential takeover partners, analysts say.
The company’s share price is outperforming overall average improvement on the Cotation Assistée en Continu 40 stock index. At press time, Accor’s shares had risen since the beginning of 2015 by 35.7% compared to the overall CAC-40—a vehicle of the Euronext Paris stock exchange. The CAC-40 was up nearly 22% during that time frame.
Julien Richer, sell-side analyst, hotels and leisure, at Raymond James, said the stock market views Accor with much interest.
“I think for (mergers and acquisitions) Accor is a more credible option than (InterContinental Hotels Group),” Richer said. There has been talk of IHG being “vulnerable” to takeover, most recently from investment banking firm Jefferies.
Richer added Accor’s recent strong performance revealed three main points:
· The split of Accor into two entities gives it room to show its operational improvements.
· The market is looking at a potential spin-off of the two divisions.
· Accor is one of the most intriguing M&A candidates.
Richer said Accor’s HotelServices division (its operations arm) might be its most attractive buy as far as the market is concerned.
As Accor expansion in Asia has been mentioned often of late and recently it made a development deal for 350 to 400 Accor hotels in China with China Lodging Group, an Asian takeover would not be unlikely, according to Richer.
At press time, Accor had not returned requests for comments on this specific aspect of their activity.
Accor has continued in healthy fashion with its first quarter 2015 results, in which it posted a 5.6% increase in overall, like-for-like revenue to €1.2 billion ($1.3 billion). Overall growth during the preceding fourth quarter showed a 5.1% increase.
Accor has had rocky dealings with the stock market in recent years, most notably with Eurazeo and Colony Capital, which, reports said, ended with the August 2013 appointment of Accor CEO Sébastien Bazin who formerly headed up Colony Capital.