Shares of Marriott International Inc. and Starwood Hotels & Resorts Worldwide Inc. climbed in U.S. trading after China’s richest man Wang Jianlin said he has hired two investment banks to buy hotel management companies.
Marriott gained 3.2 percent, the biggest increase in three weeks, and Starwood advanced 1.4 percent in trading on the New York Stock Exchange yesterday.
Wang’s Dalian Wanda Group wants to build hotels in as many as 10 major cities around the world including projects planned for London and New York, Wang said in an interview with Bloomberg News at the World Economic Forum in Dalian yesterday. He didn’t name the investment banks or targets, and said he had been in talks with “several” companies over the past year.
“It’s a slow process. Those companies we liked, they might not be willing to sell,” Wang said. “Those willing to be bought, we might sometimes feel the brand isn’t as good. For those open to a sale and at the right price, the negotiations can also sometimes be very tough.”
Wang said he is also in talks with overseas movie theater chains following his $2.6 billion purchase of the second-largest U.S. cinema operator AMC Entertainment Holdings Inc. last year. At the time, it was the biggest acquisition of a U.S. corporation by a Chinese company.
Wang’s closely held Dalian Wanda Group develops property and shopping malls and runs department stores, luxury hotels and movie theaters. Over two decades, he has built 72 shopping centers throughout China called “Wanda Plazas,” anchored by his company’s department stores, office buildings and cinemas.
He said he wants to build five-star hotels at a rate of 15 per year. Wanda has 40 hotels.
“Wanda is looking at hotels as this is an important business, and hotels are the biggest luxury item globally, even bigger and more expensive than yachts and planes,” he said.
Dalian Wanda’s revenue will exceed $100 billion by 2020 with least 20 percent of sales coming from outside of China, he said. Wang is accelerating acquisitions overseas as the real estate market in China is overheating.
China’s property market is “definitely” in a bubble, Wang said. At the same time, it is “controllable, not big.”
The Dalian Wanda conglomerate is owned by Wang and his son Wang Sicong. The 58-year-old has a net worth of $13.7 billion, according to the Bloomberg Billionaires Index.
Wang said he plans to go forward with plans to sell shares in AMC overseas. Last month, AMC disclosed plans for a U.S. initial public offering, seeking $400 million. The chain may use proceeds to fuel expansion and repay debt, according a regulatory filing. The company had about $2.1 billion of long-term debt on June 30.
He acquired a stake in Sunseeker International Ltd., a U.K.-based maker of luxury yachts used in the James Bond movies, for $1.6 billion in June. Wang said he also plans to spend more than $1 billion to build a luxury residential complex along the banks of London’s Thames river.
The billionaire is the oldest of five brothers born to a military family in western China’s Sichuan province, near the border with Tibet. His father fought for Mao Zedong’s Red Army during the Long March campaign in the 1930s, and later against the Japanese in World War II.
Wang joined the People’s Liberation Army as a teenager and served for 16 years before he was honorably discharged as an officer. He later landed a job at an indebted residential developer affiliated with the Northern port city of Dalian, changed the company’s name to Dalian Wanda and became the general manager in 1992. He took control in 1998.
When asked if he believed his company would become as large as it is today, Wang laughed.
“No, I didn’t dare to dream so big then. Then, the thinking was we’d strive for 100 million yuan and that would be enough,” Wang said. “My initial thinking was that I would make some money and provide my family with a better life. But as we expanded, the goal kept changing and kept increasing.”