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Formosa International Hotels Corporation to Acquire Regent Brand

Travel News Asia Latest Travel News Podcasts Videos Monday, 19 April 2010

Carlson and The Rezidor Hotel Group have entered into a definitive agreement with Formosa International Hotels Corporation (FIHC) under which FIHC will acquire the Regent luxury hotel business. The master purchase agreement for the transaction includes customary conditions, which are expected to be fulfilled within the next month.

The Regent brand is owned by Carlson and its subsidiaries, which globally operates and licenses the Regent brand, including hotels, residences and cruise ships. In 2003, Carlson expanded its relationship with Rezidor under a separate master franchise agreement to include the development rights for Regent in Europe, the Middle East and Africa. The acquisition by FIHC includes the sale of the global Regent brand and all associated intellectual property, the hotel management and lease contracts for properties in operation and under development, and the Regent Seven Seas Cruises license.

FIHC is the original owner of the Grand Formosa Regent Taipei, which was opened 20 years ago by Regent founders Robert Burns, Adrian Zecha (who later founded Aman Resorts) and George Raphael.

Regent plans to return to gateway cities such as Hong Kong, Tokyo, Shanghai, New York, Beverly Hills, London, Paris, and Sydney. Pipeline hotels include projects in Abu Dhabi, Bali, Bangkok, Doha, Dubrovnik, Gurgaon, Kuala Lumpur, Maldives, Phuket, and Puerto Rico.

 "We appreciate the wisdom of Carlson and Rezidor in choosing FIHC, who can focus on pure luxury and ensure the future success of Regent. Our mission is to build Regent into the most admired luxury hotel brand in the world that exceeds even the high expectations of Regent owners and guests," said S. Steven Pan, Chairman of FIHC.

Transitional agreements are in place whereby Carlson will continue to provide reservations and other services to the existing Regent network and Rezidor will continue to provide management services for Regent Hotels in Europe, the Middle East and Africa and maintain their current relationship to hotel owners.

The transaction will provide Rezidor with a positive impact on cash flow and profit. Rezidors share of the transaction proceeds amounts to a cash consideration of approximately MEUR 9.5. The sale of this part of Rezidors business will have an annual positive effect of MEUR 2 to 3 on Rezidors EBITDA in the foreseeable future.

In addition to the positive impact on annual cash flow and net profit, this deal will also free up resources to improve our operations and accelerate the expansion of Rezidors core brands. After a careful consideration, we came to the conclusion that Formosa provided an excellent fit to Regents future. They are exclusively focussed on the luxury hotel segment, and are committed to growing the brand internationally, said Kurt Ritter, President and Chief Executive Officer of The Rezidor Hotel Group.

Otus & Co acted as a financial advisor to Rezidor and Carlson for this transaction.

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