A consortium led by buyout firms are in advanced talks to take Hong Kong-listed Zhejiang New Century Hotel Management, private, according to people familiar with the matter, Bloomberg reports.
Ocean Link Partners and Sequoia Capital China are weighing an offer that could value the hotel chain operator at about HK$5 billion (US$645 million), which is about 25 percent above its market valuation as of Monday, the people said. New Century Hotel’s management could also join the take-private bid, said the people, who asked not to be identified as the discussions aren’t public.
An announcement could come Wednesday, the people said. Negotiations could still be delayed or fall apart and the take-private offer is subject to approvals by Chinese regulators and shareholders, the people said.
Trading in New Century Hotel has been suspended since Tuesday morning, pending a release of an announcement under the takeover code. The company has a market value of about HK$4 billion as of Monday.
A representative for Ocean Link declined to comment, while Sequoia Capital China and New Century Hotel didn’t immediately respond to requests for comment.
New Century Hotel, founded in 1988, manages more than 580 hotels in the world’s second largest economy, according to its website. It posted a net loss of 92 million yuan (US$14 million) for the six months ended June 30 as the coronavirus outbreak weighed on its business. The company raised about HK$1.2 billion in its Hong Kong initial public offering in 2019.
Ocean Link Partners, which focuses on China’s consumer, travel and telecommunications, media and technology sectors, was part of an investor group that agreed to take 58.com Inc. private last year in a deal valuing China’s biggest online classifieds firm at about US$8.7 billion.
