Morgan Stanley Reaches Deal
To Buy 13 Hotels From ANA
by Hiroyuki Kachi
From The Wall Street Journal Online
April 16, 2007
Morgan Stanley has agreed to buy 13 hotels in Japan from All Nippon Airways Co. for about ¥281.3 billion ($2.37 billion), in a deal that will mark a major investment in Japan's hotel business by the U.S. investment bank.
The hotels to be sold include the ANA InterContinental Tokyo and resort hotels on the southern Japanese island of Okinawa.
The move comes as a recovering economy has lifted Japanese land prices for the first time in a decade and a half, unleashing a flood of foreign investment. There has also been a hotel-building boom in the country's biggest cities. Morgan Stanley itself bought the Westin Hotel Tokyo from Sapporo Holdings Ltd. in 2004.
"This transaction highlights Morgan Stanley's continued long-term commitment to investing in Japan and optimistic outlook for the nation's economy and hotel industry," said the U.S. investment bank in a press release.
Japan's second-largest airline, commonly known as ANA, said the sale will generate a special profit for the fiscal year ending March 2008, but it is still determining how much. The sale of the building, land and shares of the hotels is scheduled for June 1. The move is in line with ANA's strategy of focusing on core passenger and cargo flight operations.
ANA is forecasting a record operating profit of ¥89 billion for the year ended March, reflecting its success in luring the profitable business-travel segment onto its domestic and international flights. But it wants to further strengthen its competitiveness ahead of an expansion and new runway at Tokyo's Haneda Airport, slated for 2010.
After the purchase, the 13 hotels will be operated by a joint venture that was launched by ANA and Intercontinental Hotels Group PLC last year.
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