Song Yong-deok, CEO of Lotte Hotel, celebrates the opening of L7, a new boutique hotel in the famous Myeongdong shopping district, on Jan. 11, 2016. (Image : Yonhap)
SEOUL, Jan. 11 (Korea Bizwire) – Lotte Hotels & Resorts, Lotte Group’s hotel unit, said Monday it will actively look for overseas business opportunities through mergers and acquisitions (M&As) once it acquires cash from the highly anticipated initial public offering.
Lotte Hotel last month submitted its application for market floatation on the Seoul bourse, taking one of the critical steps needed for retail giant Lotte Group to improve its corporate transparency. It plans to finalize the deal within the first half of this year.
“With cash acquired from the IPO, we will be able to consider additional M&A deals if there are fitting opportunities. Our final goal is to foster Hotel Lotte as a global brand,” Lotte Hotel CEO Song Yong-deok said in a press briefing.’
Song said Lotte has received several offers after it bought New York Palace Hotel in Manhattan for $805 million last year, setting its sights on M&A activities in the global hotel industry.
Lotte has opened and bought hotels in Uzbekistan, Russia and Vietnam since 2010, and also is building hotels in China and Myanmar.
The conglomerate said earlier that Lotte Hotel is expected to have a market capitalization of around 10 trillion won ($8.6 billion) when it is publicly traded. But market watchers say losing one of its duty-free stores in Seoul in the recent competition could lead to the re-evaluation of its market value.
Although the net income from its hotel business only accounts for a mere 1 percent of the group’s total, Song said his firm has played an important role in improving the corporate image and paving the way for other businesses to enter the new market.
Lotte Group is South Korea’s fifth-largest conglomerate with sprawling businesses in food, retail, construction and finance.
“Lotte Hotel focuses on how it can play the role of a flagship that provides easier access to other affiliates (overseas),” he said.
At home, Lotte is stepping up efforts to expand its mid-tier hotel brands to lure a growing number of foreign travelers, unveiling a lifestyle concept hotel, called L7, in the famous Myeongdong shopping district.
The company said the new boutique hotel will target fashion-conscious female travelers in their 20s to 40s, with a stylish rooftop bar, spa service and beauty amenities.
The upscale boutique hotel opens Tuesday, coming just a week after Lotte launched its seventh business hotel brand within a 10-minute walking distance.
“Although there are several boutique hotels in this area, L7 will differentiate its service to showcase a lifestyle hotel brand,” Song said.
Following the inaugural one, Lotte said it will open a second L7 hotel next year in Hongdae, a vibrant area in northern Seoul famous for its hip culture and urban art places.
(Yonhap)
