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(Adds details of deal and background)
By Scott Murdoch
SYDNEY, Aug 25 (Reuters) - Private equity firm PAG said on Friday it is buying hotels chain Australian Venue Co (AVC) from rival KKR & Co Inc, in a deal that, according to two sources with direct knowledge of the transaction, is worth more than A$1.4 billion ($898 million).
KKR and PAG declined to comment on the price. The sources did not wish to be named as the pricing details were not contained in the official statement.
The deal is expected to close later this year.
AVC operates 210 hotels and restaurants in Australia and New Zealand.
The decision by PAG to buy AVC comes even though consumer sentiment in Australia is weakening as 12 interest rate increases in 13 months to tackle rising inflation crimps retail spending and confidence.
KKR bought a majority stake in AVC in 2017 when the company had 50 outlets, according to the statement.
Buying AVC is PAG's latest investment in Australia's consumer sector where it also owns manufacturers Patties Foods and Vesco Foods.
KKR had previously tried to float AVC, with the latest attempt in May 2021 when it tried to raise $A352 million by selling a stake in the business.
The listing was shelved though because of the COVID-19 pandemic and lockdowns in Australia, local media reported at the time. ($1 = 1.5596 Australian dollars) (Reporting by Scott Murdoch in Sydney; Editing by Tom Hogue and Muralikumar Anantharaman)