ChinaTravelNews - The third quarter financial report of Huazhu Hotels (China Lodging Group) indicated that the group has acquired a 5% stake in Homeinns for RMB435 million (approx: US$68 million) .
Huazhu Hotels CEO Qi Ji won't be left out of any deals concerning rival Homeinns
Homeinns received a joint privatization proposal from BTG Hotels, Ctrip, Neil Shen and James Liang and its own CEO David Sun in June this year. This proposed privatization would mean Homeinns might delist and return to the A share stock market as a BTG Hotels's holding.
Huazhu Hotels's generous acquisition of Homeinns could be a win-win to Huazhu, both as a financial investment and as a means to achieve other strategic goals.
ChinaTravelNews’s CEO Charlie Li thinks that HuazhuHotels is possibly making this move to inflate Homeinns's share price and thus push up the price of its proposed privatization. In this way Huazhu Hotels can still earn money from the privatization without even directly participating. Finally, Huazhu Hotels is likely to continue acquiring Homeinns equity in the open market to strengthen its negotiating power in Homeinns's privatization process.(Translation by David)
