Colony Invests in Accor Hotels

Colony Capital says the investment agreement "cements a long standing relationship between Accor and Colony, dating back to 1998."

Approximately half of Colony's investment will be structured as convertible bonds that will mature in 2008 and the other half as convertible bonds maturing in 2010, with both sets of bonds redeemable in shares of Accor. As part of the deal, Thomas J. Barrack, Colony's founder, chairman and CEO, and Sébastien Bazin, CEO of Colony Capital's European subsidiary, will join the supervisory board of Accor. The investment has been approved unanimously by the supervisory board of Accor and will be submitted for approval by Accor's shareholders at the next general meeting in May.

Besides owning hotels, Accor also provides services to corporate clients and public institutions, with 14 million people in 34 countries using services and loyalty programs engineered and managed by Accor.

Colony, a private, international investment firm focusing primarily onreal estate-related assets and operating companies, has invested more than $12.5 billion in more than 7,650 assets through various corporate, portfolio and complex property transactions since 1991. Hospitality assets represent more than 35% of its portfolio, and one third of its investments have been made in Europe, where it has been present since 1996.

The investment by Colony was led by Colony Investors VI and Colyzeo. Colyzeo is the European investment fund created in 2003 from the partnership between Colony Capital and Eurazeo. Colony Capital was advised on the Accor investment by Goldman Sachs International.