France-based Accor has decided to sell its stake in French casino operator Lucien Barriere. The company expects to sell its 49 percent stake in Barriere for between €500 million and €700 million.
The Financial Times reports that the move is part of a larger effort at restructuring Accor that is primarily centered around a divestment of the group’s hotel business from its services and vouchers business.
In 2009, Accor increased its stake in Barriere, acquiring an additional 15 percent of the casino company for €271 million.
Accor also intends to speed up its plan to sell off its physical hotel properties. The objective is to raise cash and continue moving toward a franchise-and-management-contract business model. Accor still owns about 40 percent of its hotels, but wants to reduce ownership to 29 percent by 2013. So far, the company has raised 25 percent of its 2010 goal of €450 million in cash. The target is €1.6 billion in cash by 2013.
The Accor board intends to have the hotels division repay €1.2 billion of the total €1.6 billion of debt by the end of 2011.
Gilles Pélisson, executive chairman of Accor, said of the divestment plan, “We wanted to have two companies which would be well-rated within their environments. We want to have two stars and not one dog and one star.”
Shareholders will have the opportunity to vote on the plan on June 29.