InterContinental Hotels Group (IHG) has agreed to acquire a 51% stake in Regent Hotels and Resorts for US$39 million in cash, and will have the right to acquire the remaining 49% interest in a phased manner from 2026.
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, founded in 1970, from six hotels today to over 40 hotels in key global gateway city and resort locations over the long-term. There are currently three hotels in the Regent pipeline of under 1,000 rooms, and IHG's plan for 40 hotels will add more than 10,000 rooms to the brand.
IHG CEO Keith Barr said in a statement: "IHG is already one of the world leaders in luxury with our InterContinental Hotels and Resorts brand, but we see significant potential to further develop our global footprint in the fast-growing luxury segment. As one of the pioneers in defining luxury hotels both in Asia and around the world, Regent is an excellent addition to IHG’s portfolio of brands. We see a real opportunity to unlock Regent’s enormous potential and accelerate its growth globally."
The acquisition is part of one of IHG’s new strategic initiatives focused on continuing to expand its footprint in the $60 billion luxury segment. This initiative is supported by the creation of a new dedicated division to further enhance its capabilities in this area and will be funded by IHG’s efficiency programme, as outlined at its full year results on February 20, 2018.
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IHG also revealed that following an extensive refurbishment due to commence in early 2020, InterContinental Hong Kong will become a Regent Hotel in early 2021. The hotel originally opened its doors in 1980. Gaw Capital Partnership chairman Goodwin Gaw said: "The InterContinental Hong Kong is internationally acclaimed as one of the world’s best hotels and is prized for its unrivalled views of the Victoria Harbour and Hong Kong Island. Originally built as The Regent Hong Kong in 1980, the hotel was rebranded to InterContinental Hong Kong in June 2001. The hotel is primed to undergo a spectacular transformation that will position it as one of the top hotels not only in Asia, but also as one of the world’s most iconic hotels. We are absolutely delighted that after the refurbishment, we will be opening our doors once again as The Regent Hong Kong, a flagship property for the Regent brand, returning the property back to its original roots."
The acquisition is through a joint venture with Formosa International Hotels Corporation, and will be paid in cash - in three portions of $13m each. The first payment will be upon date of completion, the second in 2021 and the third in 2024. Formosa International Hotels Corporation executive chairman Steven Pan added: "Regent was founded by legendary hotelier Robert H. Burns, who sought to combine Asian hospitality and Western elegance to create a leading luxury hotel brand. 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. IHG shares our vision for the brand and has the ability to make our ambition a reality. IHG has a deep understanding of how to protect what makes the Regent brand so unique and special, whilst at the same time ensuring that the brand can grow and thrive on a global scale."
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