The hotel brand Regent has been sold by Carlson and Rezidor to Taiwanese owner-operator Formosa International Hotels for a reported $56m.
The transaction provides one of the few markers for hotel brand company valuations and is further evidence of economic power moving from West to East.
The Regent brand had been owned by Carlson and its subsidiaries since 1997. Carlson bought it off Four Seasons following its creation by Robert Burns, Adrian Zecha and George Raphael, all three icons of the hotel industry.
The deal encompasses the global Regent brand and all associated intellectual property, the hotel management and lease contracts and the licence for the cruise business under the brand.
Carlson will continue to provide reservation services and Rezidor will continue to provide management services in EMEA.
FIH describes itself as the largest and most profitable hotel company listed on the Taiwan Stock Exchange with a market cap of $900m and no debt. Its main asset is the 538-room Grand Formosa Regent Taipei which incorporates what it claims is the foremost luxury shopping area of its kind in Asia.
Chairman and owner of FIH Steven Pan said he wanted to build Regent into one of the most admired luxury hotel brands in the world. As well as hotels, the brand would diversify into residential property and shopping malls.
The financial adviser to both Carlson and Rezidor on the sale of Regent was Otus & Co.
HA Perspective: The price paid for Regent is an interesting yardstick but as ever it needs clarification.
To start with, the lease on the Berlin Regent has been a leech on Rezidor's profitability since it was rebranded from a Four Seasons in 2004. Rezidor said that the impact of selling its Regent operations would be a net positive of Eu2m to Eu3m on EBITDA a year, most of which is down to the lease as there is otherwise just two management contracts. It was this level of pain on the fixed lease that caused Four Seasons to walk away from the property.
The problems of the Berlin lease is likely to have been a concern for buyers but it appears that there remained a significant enough appetite to bid the value of the brand up during the auction.
The sale of the Regent will be a fascinating comparator for DLF, India's largest real estate company, as it attempts to sell Aman Resorts. The luxury resort chain, which also has a Regent link in that it was set up by Adrian Zecha who retains a small ownership interest of 3%, was acquired by DLF for $600m in late 2007.
But unlike the Regent auction, this sale include significant real estate among its 23 hotels including the old Lodhi Hotel in Delhi, which was opened subsequent to the sale.
So while the Aman disposal will not shed further light on brand valuations it will at least give a further indication as to where the balance of global power lies in the hotel sector. At this point, it would be a surprise to see Aman heading into Western hands.