Lemon Tree to buy Keys Hotels for Rs 471 cr, deal likely in two months

To fund buyout, its subsidiary will raise capital from a Dutch pension fund, an existing investor, and parent Lemon Tree by issuing compulsorily convertible preference shares worth Rs 421 cr

Mid-range hotel chain Lemon Tree Hotels is acquiring Keys Hotels for Rs 471 crore in a bid to expand its portfolio. 

In a stock exchange notification, the New Delhi-based company said it would buy out Berggruen Hotels, the parent of Keys Hotels, at an enterprise valuation of Rs 605 crore ($87.6 million). The Warburg Pincus-backed hospitality company is making the acquisition through Fleur Hotels, its wholly-owned subsidiary. With this, Berggruen Hotels will become an indirect subsidiary of Lemon Tree. The company expects to complete the transaction within two months.

To fund the buyout, Fleur Hotels will raise the capital from Dutch pension