Paris: Assuaging French fears of a possible takeover, Jin Jiang will not for now take a place on the board of AccorHotels, although China's state-owned group said Tuesday it was in talks with its European rival.
Last month, French President Francois Hollande warned Jin Jiang, the world's seventh-largest hotel group, against setting its sights on a possible takeover of AccorHotels.
Jin Jiang, which last year snapped up France's Louvre Hotels Group, Europe's second largest hotel grouping, has increased its stake in AccorHotels from five percent at the start of the year to over 15 percent at one point, becoming its largest shareholder.
That sparked French concern it may target control of a company which owns brands such as Pullman, Mercure and Ibis.
At an extraordinary general assembly meeting of the French firm in Paris, Jin Jiang could have secured a board seat, but chose not to do so.
"So far, we have not yet applied for board seats..." said Jin Jiang International's Vice President Chen Liming in a statement after the meeting.
"Should we feel it necessary, we shall discuss with the Board so as to make more contribution to the company," he added.
Jin Jiang has also indicated to French stock exchange regulators that it has no intention of taking control of the French company.
AccorHotels CEO Sebastien Bazin said talks had not yet thrown up a "good solution to advance more strongly together".
But he told shareholders that "the more AccorHotels is in the hands of powerful international shareholders the more they will help the group navigate stages of a world which is evolving all the time."
Chen said that "we believe if two major hotel companies in Europe and Asia could join hands, our complimentary resources and advantages could be better leveraged to gain edges in the fierce global competition."
French newspaper Le Figaro reported in June that Jin Jiang wanted to lift its stake to 29 percent stake, just below the 30 percent level that would force it to make a public offer to purchase the remaining AccorHotels shares.
With AccorHotels increasing its group capitalisation, Jin Jiang's stake has fallen back to 12.6 percent, but it remains the number one shareholder.
Tuesday's meeting also saw AccorHotels shareholders approve the purchase of Fairmont Raffles Hotels International for $2.7 billion.
AccorHotels also announced it was making its property unit HotelInvest, which controls 1,100 hotels, a subsidiary before opening it up for investors to take a majority stake.
Even though AccorHotels plans to give up a majority, it aims to keep control over the unit.
"I am not in the process of giving up control and the identity of HotelInvest but give it a phase of acceleration" of growth, Bazin told AFP by telephone.
Shares in AccorHotels rose 1.7 percent in Paris to close at 37.61 euros.
AFP
