(SEE UPDATE FOLLOWING ARTICLE)
Cinven Ltd. is the leading bidder to acquire Tui’s online hotel booking business Hotelbeds Group, the Bloomberg News Service has reported, saying that Cinven is in final negotiations to acquire the business after outbidding other buyout firms. Tui may announce a sale as early as this week, sources said, although talks could be delayed or fall apart.
The London-based Cinven is a global private equity firm with offices in 9 international locations in Europe, Asia and North America. In 2014, it had €11.5 billion ($16.7 billion) in assets under management. Cinven’s funding base originally came solely from three UK pension funds (British Coal, the Railway Industry and Barclays Bank) who remain as important investors.
Ever since Tui announced last October that it was considering spinning off Hotelbeds, which is headquartered in Palma de Mallorca, Spain, it has manage to focus interest on the matter almost non-stop, making certain to publicize financial updates on the company’s strong financial position and, presumably, its worth. A review of some of the coverage of the impending acquisition of Hotelbeds shows the major players:
—The HNA Group: It fit the description given two months ago by Uri Argov, founder and CEO of Tourico Holidays, of the type of Chinese firm that he said would acquire Hotelbeds.
—JTB: It was mentioned by a UK financial insider website as a finalist in the competition to take over Hotelbeds.
—TripAdvisor: Also mentioned by a UK financial insider website as a finalist in the competition to take over Hotelbeds.
—Expedia: Reported by Bloomberg at the end of 2015 to be a leading candidate to acquire Kuoni and was still in hunt to acquire Hotelbeds.
—Booking.com: It was reported by Spanish trade news site, preferente.com as a leading candidate
—Permira: It was among reported among early finalists to acquire Hotelbeds.
—EQT Partners: It was reportedly tipped by Tui to be lead candidate to acquire after EQT, a well-known Swedish private equity firm, acquired Kuoni; it was also promoted by the German travel trade publication, FVW, as the logical candidate to acquire Hotelbeds. Should EQT prevail it would have the world’s largest bedbank operation, as its acquisition of Kuoni included the latter’s mega-bedbank, GTA.
—Bain Capital: It was mentioned by preferente.com as a competitor to acquire Hotelbeds; it is the company founded in 1984 by Bill Bain and 2012 Republican Presidential Candidate Mitt Romney. Bain Capital owns Apple Leisure Group, a travel and resort company focused on packaged travel and hotel management in Mexico and the Caribbean.
UPDATE, April 28:
It was reported today that Tui has agreed to sell its Hotelbeds unit for €1.2bn ($1.75 billion). The following is from the TTG dispatch on the news.
“The acquisition by private equity firm Cinven Capital Management and the Canada Pension Plan Investment Board is expected to be completed by the end of September.
Tui put its bed bank unit up for sale last year, saying that it wanted to focus on its core tourism business.
Fritz Joussen, chief executive of Tui Group, said: ‘With the disposal of Hotelbeds, we consistently implement our strategy and strengthen our alignment as the world’s number one tourism group. There were numerous bidders for Hotelbeds Group. Following intensive negotiations, we decided to sell Hotelbeds to Cinven Capital Management and Canada Pension Plan Investment Board.’
He added: ‘We will use the disposal proceeds to continue our growth path, in particular in terms of content, and strengthen our balance sheet,” says Joussen.’”