CHINA - CEO of Wanda Inc., as well as the richest man in China Wang Jianlin, has already put expanding into the global luxury hotel field onto his agenda, for which he is now seeking overseas acquisition opportunities widely.
Wang indicated in September that he had hired two investing banks to deal with the acquisition related issues where most of the companies they aimed at were located in the US. Robert W. Baird & Co. suggested that taking over the privately held company Four Season Hotels in would be an prior choice which could help Wanda take the first step.
As it is uncommon to see high-end hotels being sold officially, Wanda also take Morgans Hotel Group, Viceroy Hotel Group and Kimpton Hotel & Restaurant Group into consideration. While though Morgans Hotel Group presents the highest value over the industry, Wanda is adequate enough to make it relying on its capital base.
Head Researcher of Savills Plc Co. Shanghai office McDonnell said "This is a major trend that Chinese companies begin to focus on the overseas market, bring foreign managerial intelligence to China while taking their own experience outside to make full use of both domestic and overseas markets. "
Wang Jianlin told the press at Davos Forum that Wanda planned to build five-star hotels in 10 major cities throughout the world at an annual rate of 15 per cent, for which he had already discussed with several corporations over the last year.
Hotel industry in the U.S. is now benefiting from the growing demand for accommodation, because of which the share prices of Starwood and Marriott's hit new records in May over the past several years. Meanwhile, the room revenue keeps raising In America, which, according to STR, will increase 5.7% by the end of this year and this growth rate is predicted to be 6% next year. Analyst Bala from FBR suggested the present a good time to enter the market since further increase will been retained in hospitality industry for several years.
Robert W. Baird analyst, Loeb believes that Four Season Hotels, who owns 91 properties in 38 countries is capable to fulfill Wanda's ambition and that is highly likely to be acquired at a "reasonable price". Whilst analyst from SunTrust, Coles adds that boutique hotel brands that target wealthy younger generations such as Morgans, Viceroy and Kimpton are also reasonable choices.
Wanda Inc. was founded in 1988 as a residential real estate company and since 2005, it has diversified into several areas including hotels, cinemas, karaoke centers, and department stores. By 2012, the company owns a total of 49 Wanda Plazas, 28 five-star hotels, 730 cinema screens, 40 department stores, and 45 all karaoke centers, making itself one of the hugest corporations in China. In the report of Huren.net, CEO of Wanda Co., Wang Jianlin is ranked the richest man in China who is worth 135 billion RMBs.