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Lone Star to sell Japanese hotel operator Solare

(TOKYO) Lone Star has hung a for sale sign over its Japanese hotel operator Solare Hotels and Resorts Co Ltd, sources familiar with the matter said, in a deal which could raise 150 to 200 billion yen (S$2.6 billion).

The US investment fund has engaged real estate services firm Jones Lang LaSalle to handle the sale process. Blackstone is believed to be among several parties interested in Solare, the sources said. Lone Star and Blackstone declined to comment.

Lone Star has two ways to cash out; it has paved the way to list a hotel real estate investment trust (Reit) which could include Solare. This would be managed by Star Hotel Reit Management Co Ltd, which Lone Star has recently set up.

But with the Japanese Reit market under pressure amid the US sub-prime mortgage crisis, they may instead seek to sell Solare to a trade buyer or another fund in an auction.

Dallas-based Lone Star took over hotels owned by real estate developer Chisun Co which filed for bankruptcy protection in 2002 and created Solare. Solare now has 55 locations nationwide with a total of 10,823 rooms as at August. The group includes hotels, spas and a ski resort. The firm operates roadside hotels under the Chisun brand and upscale hotels under the Solare Collection banner.

 

Source: Reuters (Business Times 22 Nov 07)

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