InterContinental Hotels Group will absorb more than half of the Regent Hotels and Resorts brand in a US$39 million ($49.5m) cash-in-hand deal.
The deal is part one of the British hotelier’s plan to expand upmarket in the fast-growing $60 billion luxury segment.
IHG intends to grow the Regent brand to over 40 hotels from six in global city and resort locations over the long term.
IHG chief executive Keith Barr says he sees significant potential to further develop the Hotel’s global footprint in the fast- growing luxury segment.
“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,” he said.
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“In addition, by creating a dedicated luxury division, we will be bringing together some of the most experienced and respected people in the industry who will help drive our luxury offer, ensuring that our existing luxury brands continue to evolve and allowing us to bring in new brands such as Regent to enhance our brand portfolio.”
The cash deal will be paid in three tranches of $13 million, according to a statement released by the Hotel Group. The first upon the date of completion, the second in 2021 and the third in 2024.
These amounts will be funded within IHG’s existing capital expenditure guidance of up to $350 million gross, and $150 million net, per annum into the medium term.
Now with a primary stake in the name IHG also announced that InterContinental Hong Kong, which originally opened its doors in 1980 as a Regent, will become a Regent Hotel once again in 2021 once a full overhaul is finished.
While IHG agreed to acquire 51 per cent in Regent, they will have the right to acquire the remaining 49 per cent interest in a ‘phased manner’ from 2026.