There's an interesting twist in the sell-off story of Sarovar Hotels that's been playing out for over a year now.
Sources told DNA Money that the NYSE-listed global hospitality major Wyndham Hotel Group (WHG), which lost out earlier due to valuation disagreement, is now back in the race for this potential acquisition in the making.
On October 11th, DNA Money had reported that France's Louvre Hotels Group is circling the 73-hotels strong Indian hospitality chain.
Louvre Hotels, which also holds 50% in Golden Tulip Hospitality Group in India, is understood to have offered a valuation, which according to sources, was lower than what Wyndham had offered. "This (evaluation) has not gone well with the Sarovar promoter group and their possibilities of closing the deal with Louvre / Golden Tulip look very bleak now," sources said.
Accordingly, taking a second chance at acquiring Sarovar Hotels & Resorts, Wyndham has made a better offer to the Sarovar promoters and the two are back on the discussion table again. "Both Sarovar and Wyndham have reinitiated talks," sources said.
When contacted, Deepika Arora, regional vice president - EurAsia, Wyndham Hotel Group, said, "I have no comments to offer."
Anil Madhok, managing director, Sarovar Hotels & Resorts, could not be reached for a comment. An email to both Madhok and Ajay Bakaya, executive director, Sarovar Hotels & Resorts remained unanswered at the time of going to print.
DNA Money could not ascertain the financials pertaining to the offers being made by both Louvre / Golden Tulip and Wyndham Hotels Group. However, as per our earlier report on this deal in March 2016, Sarovar's enterprise value was pegged around Rs 330 crore and Wyndham had made an offer of Rs 270 crore. This offer was after discounting revenues from the Carlson portfolio of (Park Inn, Park Plaza and Radisson branded) hotels in the Sarovar Hotels network.
The earlier numbers certainly don't hold water now considering a lot of things have changed since. The Sarovar management has been aggressively working towards brand-building advertising campaigns on television as well as adding newer properties to its network. For instance, the total number of operational hotels eight months ago was 70, which increased to 75 a few weeks back.
Unfortunately, Sarovar lost two hotels – Optus Sarovar Premiere in Gurgaon and Optus Hometel in Bhiwadi – just recently wherein the asset owner i.e. Gurgaon-based realtor Optus Group decided to bring Lemon Tree Hotels as the new operator to brand and manage the hotels. As a result, the new count of operational hotels under the Sarovar network now stands at 73, including one hotel each in Dar-Es-Salaam (Tanzania) and Juba (South Sudan) and two hotels in Nairobi.
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