US private equity group KKR has acquired a portfolio of 87 hotels from Australian supermarket retailer Coles for AUD200m (€125m).
As part of the deal, Coles said it would form a joint venture with Australian Venue Co (AVC), which is majority-owned by KKR.
Coles said that AVC will manage the day-to-day operations of 87 of Coles hotel and gaming business known as the Spirit Hotels, located in three states, but mostly in Queensland.
The supermarket retailer will retain the day-to-day operations of the 243 retail liquor stores in Queensland and 10 liquor stores attached to Spirit Hotels in Western Australia, and South Australia.
Paul Waterson, AVC CEO said both the hotels and the liquor stores will be owned by the joint venture.
Steven Cain, Coles CEO, said: “Over the past 12 months, Coles has undertaken an extensive review of our Spirit Hotels business to identify a suitable partner.”
Cain described AVC as “highly experienced and responsible operator of quality hospitality venues”.
“AVC has plans to grow the hotel portfolio in Queensland which will, in turn, provide Coles with the opportunity to further grow its retail liquor business in that state,” he said.
The transaction, subject to certain conditions, including obtaining consent from a small number of landlords, is expected to complete before end of June.