Starwood Capital Plans To Take Luxury Hotel Brands Public Via SPAC Merger
Starwood Capital Group is planning to take ownership of some of its luxury hotels public via a special-purpose acquisition company called Jaws Mustang Acquisition Corp. The combination will put 10 properties, two in New York and eight in the UK, under the same public structure, according to Starwood.
The New York properties include 1 Hotel Brooklyn Bridge and 1 Hotel Central Park, which are part of the 1 Hotel brand that Starwood created in 2015 that now has 11 operating properties and another eight under development in North America, Europe and Asia.
Once it is up and running, the new public company will seek to acquire additional hotels, including other 1 Hotels properties.
The UK properties include eight from the De Vere Portfolio, which are historic country estates that have been upgraded to function as luxury hospitality and meeting properties. Starwood acquired De Vere Venues from the De Vere Group for about $385M in 2014.
The De Vere portfolio totals 1,871 rooms, while 1 Hotel Central Park includes 234 rooms and 1 Hotel Brooklyn Bridge includes 195 rooms.
The bloom is long off the rose when it comes to SPACs, but the structure is still used, just less frequently than a few years ago. There were 31 SPAC IPOs in 2023, down from 86 in 2022 and 613 in 2021, according to Transactional Insurance Senior Vice President Yelena Dunaevsky, with more than half of the companies going public via SPAC in 2021 later seeking liquidation.
Gross proceeds from SPAC IPOs likewise spiked in 2021, coming in at $162.5B, according to SPACInsider data. In 2023, that figure was $3.8B.
Early this year, The Securities and Exchange Commission voted 3-2 to adopt new rules governing SPACs, with the aim of enhancing disclosure and aligning the rules for SPACs and more conventional IPOs. The rules take effect later this year.
Critics of the move, including the commissioners who didn't vote for the new rules, said that they would reduce the ability of private companies to access public capital markets, The Wall Street Journal reports.
