SHANGHAI, China, Oct. 10, 2013 (GLOBE NEWSWIRE) -- China Lodging Group, Limited (Nasdaq:HTHT) ("China Lodging Group" or the "Company"), a leading and fast-growing multi-brand hotel group in China, today announced that the Company, through one of its subsidiaries, entered into a purchase agreement ("Agreement") to acquire ordinary shares of China Quanjude (Group) Co., Ltd. ("Quanjude", SHE:002186) through a private placement of RMB100 million (approximately US$16.3 million), effective upon meeting certain closing conditions. The purchase price is set at RMB14.03 per ordinary share, calculated as not less than 90% of the average of daily trading price for Quanjude's ordinary shares on Shenzhen Stock Exchange within 20 trading days preceding the Agreement date. The transaction is expected to close within the next six months. The placement will be of a total size of RMB350 million, with the remaining purchased by IDG Capital Management (HK) Limited. Post the transaction, China Lodging Group and IDG Capital will hold 2.3% and 5.8% of Quanjude, respectively.
Quanjude, widely known for its signature dish, Quanjude Beijing Roasted Duck, is a top restaurant brand in China. With 102 restaurants across China and Asia Pacific Region, Quanjude enjoys high consumer recognition. Aside from restaurants, Quanjude also produces packaged ducks and related foods for supermarket sales. In 2012, Quanjude had annual sales of RMB1.9 billion. As of September 17, 2013, Quanjude had a market cap of RMB4.8 billion.
Mr. Qi Ji, founder, executive Chairman and Chief Executive Officer of China Lodging Group, commented, "We are delighted about this investment. Quanjude has an extraordinary brand awareness and recognition, which positions the business well for growth opportunities. This investment will also help us accumulate experience in the restaurant operation, which is a natural extension of our core hotel business."
Post the investment, China Lodging Group will have a board seat in the board and a seat in the operation steering committee of Quanjude. We will share our expertise in chain operation with Quanjude, which is expected to help Quanjude improve their network development practice, operational efficiency and profitability.
China Lodging Group does not expect this transaction to have any significant impact on its revenue, profit and cash flow in 2013. The Company maintains its previously announced revenue guidance for 2013.
About China Lodging Group, Limited
China Lodging Group, Limited is a leading and fast-growing multi-brand hotel group in China. The Company provides business and leisure travelers with high-quality, and conveniently-located hotel products under five brands, namely, Joya Hotel, JI Hotel, Starway Hotel, HanTing Hotel, and Hi Inn. For more information, please visit the Company's website: http://ir.huazhu.com.
About Quanjude
Quanjude is a Chinese restaurant chain known for its well-recognized Beijing roast duck brand "Quanjude" and its longstanding culinary heritage since its establishment in 1864 in Beijing, China. As of June 30, 2013, Quanjude had 102 restaurants under four brands, including 29 self-operated restaurants and 73 franchised restaurants in China and Asia Pacific markets. For more information on Quanjude, please visit www.quanjude.com.cn.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: The information in this release contains forward-looking statements which involve risks and uncertainties. Such factors and risks include our anticipated growth strategies; our future results of operations and financial condition; the economic conditions of China; the regulatory environment in China; our ability to attract customers and leverage our brand; trends and competition in the lodging industry; the expected growth of the lodging market in China; and other factors and risks detailed in our filings with the Securities and Exchange Commission. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements, which may be identified by terminology such as "may," "should," "will," "expect," "plan," "intend," "anticipate," "believe," "estimate," "predict," "potential," "forecast," "project," or "continue," the negative of such terms or other comparable terminology. Readers should not rely on forward-looking statements as predictions of future events or results. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.