Baker & McKenzie Advises Shanghai Jin Jiang Hotels on the First Overseas Acquisition by a Chinese Hotel Chain
Deal Announcement
January 8, 2010
Hong Kong, 8 January 2010 – Baker & McKenzie recently advised Shanghai Jin Jiang International Hotels (Group) company Limited (“JJ”) on the first overseas acquisition by a Chinese hotel chain. This involved setting up of a 50:50 joint venture (Hotel Acquisition Company, LLC or "HAC") with Thayer Lodging Group, a US-based real estate investment firm, for the US$307 million acquisition of Interstate Hotels & Resorts, Inc. whose shares are listed on the New York Stock Exchange ("Interstate"). Interstate is the US's largest independent hotel management company and a leading hotel real estate investor.
The acquisition is to be made at a price of US$2.25 per share in cash and involves assumption of all the outstanding debt of Interstate subject to certain paydowns. We also assisted JJ in the disclosure arrangements with the Hong Kong Stock Exchange.
The Baker & McKenzie team was led by M&A and securities partners Elsa Chan, Howard Wu and Anthony Jacobsen. Tax partners, Richard Weisman and Jim Barrett, and Jinghua Liu, special counsel, advised on the tax structuring issues for the acquisition and subsequent operation. The team had lead responsibility for overall documentation and general transaction management. The China-based team was also assisted by lawyers based in our New York and Chicago offices.
Commenting on the deal, Elsa Chan said, “We are delighted to have acted for Shanghai Jin Jiang Hotels, a long-standing client of the Firm, on this significant transaction, which is also the first overseas acquisition by a Chinese hotel chain. This acquisition provides Shanghai Jin Jiang Hotels with a solid platform to expand internationally.”
Shanghai Jin Jiang International Hotels, which is China’s biggest hotel operator, is principally engaged in star-rated hotel operation and management, budget hotel operation and franchising, restaurants and related businesses. It has interests in 263 hotels spread over 73 cities in China, including landmark hotels such as the Peace Hotel and Jin Jiang Hotel in Shanghai.