Portugal’s ECS Draws Private Equity Interest in Hotels Sale

ECS is drawing interest from rival private equity firms as it looks to offload a portfolio of Portuguese real estate that includes some of the country’s top hotels, people familiar with the matter said.

Lisbon-based ECS is exploring a sale of the properties, and is seeking 1.4 billion euros ($1.7 billion), the people said, asking not to be identified discussing confidential information. The ECS portfolio includes the Conrad Algarve and Hilton-branded Cascatas Golf & Resort Spa, as well as the NAU Hotels & Resorts chain, shopping centers and undeveloped land, the people said.

Bain Capital is among the firms that have been weighing bids, the people said. The assets have also drawn initial interest from Davidson Kempner Capital Management, one person said. Suitors have until the end of Friday to submit non-binding proposals, according to the people.

Some bidders could opt to make offers for the entirety of ECS, which manages four funds dedicated to investing in a range of sectors in Portugal, one of the people said. Deliberations are ongoing, and there’s no certainty they’ll result in a transaction, the people said.

Representatives for Bain, Davidson Kempner and ECS declined to comment.

Any sale would come during a difficult period for Portugal’s hotel sector, which like those in other southern European countries has been battered by coronavirus travel restrictions. Overnight stays at tourist accommodations in Portugal fell 63% last year to 26 million, the lowest level since 1993, according to the country’s National Statistics Institute.

Many of the properties in the ECS portfolio were transferred from Portuguese banks after the financial crisis prompted Portugal to seek an international bailout in 2011. Local lenders including Novo Banco and Banco Comercial Portugues are among investors in funds managed by ECS.

Preparations for a potential sale began last year after ECS received expressions of interest from investors, one of the people said. NAU Hotels & Resorts was the 12th-biggest hotel group in Portugal in 2019, with 3,778 beds, according to Deloitte’s Portuguese Hospitality Atlas for that year.

ECS was co-founded by Antonio de Sousa, a former central bank governor.

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