TKO Offers $2 Billion to Acquire 92 Hotels from Service Properties
TKO has submitted an all-cash offer of $2 billion to acquire 92 hotels owned by Service Properties Trust, alongside a commitment to capital investments ranging from $50,000 to $60,000 per room.
The CEO of TKO stated that the company is submitting an all-cash offer of $2 billion to acquire a portfolio of 92 hotels owned by Service Properties Trust, totaling approximately 21,000 rooms.
The company committed to capital investments ranging between $50,000 and $60,000 per room during the first 24 months following the completion of the deal.
TKO dropped on October 15 a requirement to terminate the Sonesta management agreements, meaning the buyer will hold about 17% of Sonesta's system of nearly 100,000 rooms.
The full financing details of the offer have not yet been disclosed, and Service Properties Trust declined to comment ahead of its earnings announcement on November 5.
What Do These Terms Mean?
Capital Expenditures: Money spent on developing or renovating assets to increase their value.
Management Agreement: A contract under which a company operates a hotel on behalf of the owner in exchange for a fee.
Cash Offer: An offer to purchase an asset or company paid entirely in cash rather than shares or other instruments.
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