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Pvt equity team up with hotel grps for 2nd round bids for China motel -sources

Published 03/24/2011, 05:39 AM
Updated 03/24/2011, 05:44 AM
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By Stephen Aldred and Lee Chyen Yee

HONG KONG, March 24 (Reuters) - Three listed hotel chains have teamed up with global private equity firms to submit second round bids for Chinese hotel group Shanghai Motel Management Co, an asset that could fetch about $1 billion, sources with direct knowledge of the matter told Reuters on Thursday.

A Morgan Stanley real estate fund that controls the company, which operates the popular Motel 168 brand, received the bids on Monday, the sources said. China Lodging Group Ltd , which operates Hanting hotels in China, had bid with Bain Capital LLC, General Atlantic and local private equity firm CDH Investments, they added.

Separate bids have also come in from 7 Days Group Holdings Ltd and Home Inns & Hotels Management Inc , which are said to be forming consortia with private equity firms that include Carlyle Group and Warburg Pincus LLC .

"It's all quite fluid right now and they are all talking to each other. It will probably take a few weeks before it's all sorted out," one of the sources said, referring to the second and third bidders.

The sources declined to be identified as they were not authorised to speak to the media.

Sell-side advisers Morgan Stanley, Goldman Sachs Group Inc and Deutsche Bank AG declined to comment.

Bain, Warburg Pincus and 7 Days were not available for immediate comment. Home Inns & Hotels, CDH Investments and General Atlantic Partners could not be reached for comment. China Lodging declined to comment. (Additional reporting by Denny Thomas; Editing by Chris Lewis)

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