Home Inns to buy Shanghai Motel from Morgan Stanley

An agreement for Home Inns & Hotels Management (HMIN.NASDAQ) to buy Morgan Stanley’s (MS.NYSE) 59% stake in Shanghai Motel Management is imminent, Bloomberg reported. While details of the negotiations are private, sources say the two firms may sign on the deal next week. The agreement may value Shanghai Motel Management at up to US$500 million. Morgan Stanley purchased its stake in the Shanghai firm, which runs Motel 168, five years ago. While Morgan Stanley had initially planned to sell its equity via an initial public offering, the firm decided to sell to a single strategic buyer due to market volatility. Non-star, non-rated hotels still made up about 95% of China’s hospitality industry at the end of 2008, which analysts say suggests that consolidation is near.