Aermont Bids £850m for Village Hotels Amid Competitive Auction

Aermont, a private equity firm, has submitted an £850 million offer to acquire Village Hotels, a UK-based mid-market hotel chain. The bid positions Aermont as a strong contender in a competitive auction process handled by Morgan Stanley bankers.

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Aermont Bids £850m for Village Hotels Amid Competitive Auction

Aermont Bids £850m for Village Hotels Amid Competitive Auction

owner, among Aermont, a private equity firm known for backing Pinewood Studios, has submitted an £850 million offer to acquire Village Hotels, a UK-based mid-market hotel chain. The bid, tabled last week, positions Aermont as a strong contender in a competitive auction process handled by Morgan Stanley bankers.

Village Hotels, currently owned by KSL Capital Partners, boasts a portfolio of over 30 properties across the UK, offering rooms at budget prices. Founded in 1995 as Village Urban Resorts, the chain features pub-style restaurants and gyms. KSL Capital Partners acquired Village Hotels from De Vere Group for £485 million in 2014.

Why this matters: The acquisition of Village Hotels reflects the growing interest in the UK's hospitality sector as it recovers from the pandemic, with private equity firms seeking to capitalize on the industry's potential for growth. This deal could have implications for the broader hospitality industry, as it may influence the direction of mid-market hotel chains and impact the way they operate in the post-pandemic era.

Aermont, with its focus on real estate-backed investments, faces competition from other interested parties, including Blackstone, a giant private equity firm also considering an offer. The hotel industry, outlook, highlights show the hotel sector benefiting from an increase in Average Daily Rate (ADR) and Revenue Per Available Room (RevPAR), although occupancy rates remain below pre-pandemic levels. Digitalization is driving growth, with hotel owners leveraging technologies such as mobile and web check-in, mobile key, and pricing optimization. Initiatives to attract customers include comprehensive cleaning and disinfection processes, contactless experiences, and streamlining operations.

The competitive bidding for Village Hotels reflects the growing interest in the UK's hospitality sector as it recovers from the challenges posed by the pandemic. With its extensive portfolio and budget-friendly offerings, Village Hotels presents an attractive investment opportunity for private equity firms like Aermont and Blackstone. As the auction progresses, the ultimate winner will likely be determined by their ability to meet KSL Capital Partners' £850 million price expectation and demonstrate a compelling vision for the future of the hotel chain.

Key Takeaways

  • Aermont submits £850m bid for Village Hotels, a UK mid-market hotel chain.
  • Village Hotels has 30+ properties, offering budget rooms and pub-style restaurants.
  • Private equity firms seek to capitalize on UK hospitality sector's post-pandemic growth.
  • Aermont faces competition from Blackstone and other interested parties.
  • Digitalization drives hotel sector growth, with focus on tech and customer experience.