Jin Jiang wants bigger stake of Europe's AccorHotels

Pedestrians walk past a Jin Jiang Inn of Shanghai Jin Jiang International Holdings Co Ltd in Changzhou city, East China's Jiangsu province, Aug 21, 2011.[Photo/IC]

Shanghai-based hotel group Jin Jiang International Holdings Co Ltd is expected to boost its shareholding even higher, after it raised its stake in French hotel operator AccorHotels Group to 15.06 percent, according to a company source.

Jin Jiang became the biggest shareholder in AccorHotels, Europe's largest hotel operator, with a holding of about 15 percent as of May 27, according to a filing to the French stock market regulator AMF, Reuters reported.

"The purchase is still in progress by Jin Jiang and the information published from AMF is the latest update," said the source in Jin Jiang, who did not want to be identified.

Shares of AccorHotels rose as much as 6.73 percent in Paris to close at 40.45 euros ($45.95) on Friday, after newspaper Le Figaro reported that Jin Jiang planned to increase its stake in the French company to 29 percent.

Since January, Jin Jiang has gradually built up its stake in AccorHotels, from 5 percent to 10 percent by the end of February, according to public information.

AccorHotels' CEO has held talks with Chinese conglomerate HNA Group to try to thwart the attempt by fellow Chinese group Jin Jiang to increase its stake in the company, Reuters reported on Monday, citing a weekend report in French newspaper Le Journal du Dimanche.

HNA already has a 10 percent holding in holiday group Pierre et Vacances SA and is in exclusive talks to take over Servair, Air France's catering subsidiary.

The weekly French newspaper said AccorHotels' Chief Executive Sebastien Bazin hoped to prevent Jin Jiang from increasing its stake to 29 percent, which would trigger a full public offer for the group.

Meanwhile, there is another option that is being backed by several ministers in the French government, which would be for the state to take a 10 percent holding in AccorHotels, the newspaper added.

Jin Jiang refused to comment on the issue, but an insider close to the matter said it was understandable there would be concerns about well-known brands becoming an acquisition target of overseas buyers.

"This is a natural reflection, similar to what Japanese companies experienced when they were making acquisitions globally back in the 1980s," said the insider.

Jin Jiang has made ambitious moves to expand, both at home and internationally, over the past a few years.

In February last year it bought Starwood Capital Group's Louvre Hotel Group for $1.49 billion.

The move was followed by another in September, when Jin Jiang signed a strategic cooperation deal with domestic hotel chain operator Plateno.

According to the deal, Jin Jiang will acquire 81 percent in Plateno, enabling it expand its network to more than 6,000 hotels in 55 countries internationally.