Accor to sell 57 European hotels

27th Dec 2007

As part of its real estate
management strategy, Accor will sell 47 hotels in France and 10 in Switzerland to a consortium. The Real
Estate Consortium includes Caisse des Depots et Consignations and two
investment funds managed by AXA Real Estate Investment Managers (European
Hotel Venture & Alternative Property Income Venture). AXA REIM is an
international leader in Real Estate Investment funds with EUR42 billion
under management at October 31, 2007. The Novotel, Mercure, Ibis, All
Seasons and Etap Hotel properties involved in the transaction represent a
total of 8,200 rooms.

  The EUR518-million transaction includes a EUR52-million renovation
program at the new owner’s expense. On top of this amount, extensions to
two of the existing properties will be financed by the owner for a total of
EUR30 million.

  Accor will continue to operate the hotels under the same brands through
12-year variable leases, whose rents are based on an average 16% of revenue
a year with no guaranteed minimum. The leases are renewable six times, for
a total of 84 years. Based on estimated 2007 revenue, the variable rent
would amount to EUR29.6 million, net of EUR3.7 million in insurance costs,
property taxes and structural maintenance capex, which are now at the
owner’s expense.

  This transaction is part of the EUR 1.9 billion asset disposal program
as presented by the Group in September 2007. Accor continues to deploy its
innovative asset management strategy designed to both reduce earnings
volatility and emphasize the focus on hotel operations.

  Furthermore, the transaction enables Accor to partner with a leading
European Property Company. The partnership agreement calls for the
development of new economy and midscale hotels in France and Switzerland
under the same operating structure, thereby enabling the Group to step up
its expansion program in these countries.


  From a financial standpoint, this transaction will enable Accor to
reduce its adjusted net debt by approximately EUR350 million in 2008, of
which EUR 300 million of cash impact, and will add around EUR5 million to
2008 profit before tax.

  Accor, the European leader and a major global group in hotels, the
global leader in services to corporate clients and public institutions,
operates in nearly 100 countries with 170,000 employees. It offers to its
clients over 40 years of expertise in its two core businesses:

  - Hotels, with the Sofitel, Pullman, Novotel, Mercure, Suitehotel,
Ibis, All Seasons, Etap Hotel, Formule 1 and Motel 6 brands, representing
more than 4,000 hotels and nearly 500,000 rooms in 90 countries, as well as
strategically related activities, such as Lenotre.

  - Services, with 23 million people in nearly 40 countries benefiting
from Accor Services products in human resources, marketing services and
expense management.


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