Carlyle beats out trade bidder

Carlyle has entered a three-month exclusivity agreement to acquire a majority stake in Spanish-based hotel chain Occidental Hoteles, sources close to the proceedings have confirmed.

The firm, which was part of a losing consortium bidding for Spanish mobile phone company Amena, is understood to be contemplating a deal that will value Occidental at upwards of €1bn, including about €300m in debt.

Carlyle beat trade buyer NH Hoteles, as well as a group of other private equity firms including Cinven. Other potential trade buyers in the Goldman Sachs-led auction included Marriott International.

CVC, Apax, Candover and Permira, as well as French hotel chain Accor, Intercontinental Hotels and Starwood Hotels were linked to the business at earlier stages in the process.

The agreement with Carlyle is a welcome result for buyout firms after French Telecom outbid two separate groups in the auction for Amena. (See page 6). However, shares in NH Hoteles rose earlier this week on news that the group had lost the bid, suggesting that the market might have thought the circa €1bn asking price was too high for that company.

Spanish-based private equity firm Mercapital is selling its stake in Occidental Hoteles, which it acquired in the late 1990s. The initial Occidental investment came from the firm’s first fund, SPEF 1.

The other pending buyouts in the Spanish market are Panrico and Cortefiel. Apax Partners made the highest offer for Spanish bakery group Panrico at €900m. Local analysts have described the price as high, saying that initial bids from rivals including Permira were about €200m lower.

The Panrico auction is being led by La Caixa and JP Morgan. As seen elsewhere on the Continent, the controlling Costafreda family behind Panrico has decided to sell its 53% stake rather than go through a succession battle. La Caixa and Banco Sabadell, which bought into the company in 2001, are also looking to sell their respective 30% and 5% stakes.

La Caixa has a stated policy of selling non-core stakes, such as Itau, Brazil’s largest bank, and Occidental Hotels. (See Cortefiel, page 5.)