Morgan Stanley Exiting Shanghai Motel Management

European hotel group Accor SA is among those bidding for Shanghai Motel Management, a chain of motels majority owned by Morgan Stanley, Reuters reported. The deal could reach $1 billion, and has seen interest from Blackstone Group LP and Carlyle Group, which reportedly held talks with Accor about forming a bidding consortium for the Chinese motel chain, Reuters said.

(Reuters) – Europe’s largest hotel group Accor SA is among bidders for Shanghai Motel Management Co, a Chinese motel chain majority owned by Morgan Stanley which could fetch up to $1 billion, sources with direct knowledge of the matter said on Thursday.

Chinese budget hoteliers Home Inns & Hotels Management Inc and Shanghai International Jin Jiang International Hotels Group Co are other bidders that might have expressed interest, they said.

The company, which operates the Motel 168 budget Chinese motel chain, offers a rare chance to grab market share in China’s booming internal travel industry.

Accor had earlier held talks with private equity funds about forming a bidding consortium for the asset, one of the sources said.

The source said that potential private equity partners for the French hotel group included Blackstone Group LP and Carlyle Group [CYL.UL].

The sources declined to be named as they were not authorised to talk to the media.

Blackstone did not respond to requests for comment. Carlyle declined comment. Accor and Morgan Stanley declined comment.

The other companies mentioned could not be reached for an immediate comment.

Wall Street Journal had reported the sale process earlier on Thursday.

Morgan Stanley holds 59 percent of the firm through a real estate fund, the Journal reported, adding that its other shareholders had agreed to sell their stakes.

Morgan Stanley has several billion dollars in real-estate assets under management in China, and its $4.7 billion Morgan Stanley Real Estate Fund VII Global is about 20 percent invested, the Journal said in its report, citing a source. (Additional reporting by Dominique Vidalon in Paris) (Reporting by Stephen Aldred and Denny Thomas; editing by Jane Merriman)