TKO bids $2.0 billion for the SVC hotel portfolio
TKO LLC submitted a formal written offer to acquire the entire hospitality portfolio of Service Properties Trust for $2.0 billion in cash. The offer is set out in a TKO release datelined Aberdeen, South Dakota, on 9 October 2026. Service Properties Trust confirmed receipt in its own statement the same day. The trust described the proposal as unsolicited and said it had no prior contact from TKO before the offer arrived.
The trust's board of trustees will review the proposal. The board said it will weigh the offer against the best interest of the company and its shareholders.
What the offer is conditioned on
TKO's release states that the acquisition remains subject to negotiation with and approval by SVC's board of directors, execution of definitive transaction documentation, and satisfaction or waiver of customary closing conditions. TKO also stated that there can be no assurance the acquisition will be completed on the anticipated terms, timeline or at all. The release says TKO has engaged legal and financial advisors and is ready to move toward definitive agreements.
Neither statement sets a price per key, a deposit or a financing plan.
The 93 hotels, brand by brand
SVC publishes the composition of the portfolio in its own brand table, dated 30 June 2026. The 93 hotels hold 21,110 rooms and suites. Royal Sonesta Hotels holds 17 hotels and 5,663 rooms, Sonesta Hotels & Resorts 22 and 7,208, Hyatt Place 17 and 2,107, Sonesta ES Suites 13 and 1,726, Radisson Hotels & Resorts five and 1,149, Sonesta Simply Suites nine and 1,388, Sonesta Select seven and 1,028, Crowne Plaza one and 495, and Country Inn & Suites by Radisson two and 346.
Five of those nine lines carry the Sonesta name. Those five hold 68 of the 93 hotels and 17,013 of the 21,110 rooms.
The same table sorts the portfolio by service level. Full service accounts for 47 of the hotels, select service 24 and extended stay 22.
The hotels against SVC's own investment figure
SVC's brand table reports $4,654,831 thousand of investment in the hotel portfolio, an average of $220,504 a room or suite. The $2.0 billion offer works out at about $94,700 a room across the published room count. That is 43.0 per cent of the published average investment per room.
SVC's investment figure is the company's own cost measure at 30 June 2026. The offer is a purchase price for the same assets.
The market value TKO names
TKO's release states that the $2.0 billion price for the hotels alone exceeds SVC's entire public market capitalisation. SVC's second quarter presentation reports equity market capitalisation of $1,094,507 thousand at 30 June 2026, on 129,527,433 common shares and an end-of-period closing price of $8.45.
The trust's quarterly filing reports 129,509,488 common shares outstanding as of 3 August 2026. On the Nasdaq close of $7.15 on 9 October 2026, the day of the offer release, that share count gives an equity value of about $926 million. On the 14 October close of $5.85 it gives about $758 million. The shares closed at $6.19 on 15 October 2026. Bisnow and The Real Deal both put the value below $1 billion.
The debt the proceeds would repay
TKO says the transaction proceeds would allow SVC to retire more than 40 per cent of its outstanding indebtedness. SVC's second quarter presentation reports debt at a principal balance of $4,723,321 thousand at 30 June 2026. The $2.0 billion offer equals 42.3 per cent of that balance.
SVC president and chief executive Christopher Bilotto said in the second quarter release that the company had redeemed $550 million of senior notes and held no borrowings under its $650 million revolving credit facility. Total liquidity was $630,511 thousand.
The net lease platform left in place
TKO describes SVC's 745-property net lease portfolio as a platform generating more than $500 million in annual EBITDA, and says the proceeds would leave it in place. That EBITDA figure is TKO's own statement. SVC's second quarter results report net lease NOI of $94.9 million for the quarter, up 1.4 per cent year over year, and net lease occupancy of 96.6 per cent.
SVC's portfolio page counts 838 properties, of which 745 are service-focused retail net lease assets and 93 are hotels. The company reports $9.7 billion invested across the two categories, in 46 states plus Puerto Rico and Canada.
What the hotels earned in the second quarter
SVC divides its hotel reporting between Retained Hotels and Exit Hotels. The 78 retained hotels hold 18,088 rooms. They recorded RevPAR of $134.53 for the quarter, up 6.6 per cent, on occupancy of 72.7 per cent and an average daily rate of $184.96. Adjusted hotel EBITDA for those hotels was $56,873 thousand.
The company reported a net loss of $223.8 million for the quarter. That loss carries a charge of $189.1 million for the impairment of hotels being marketed for sale. Normalized FFO was $55.0 million and Adjusted EBITDAre $145.8 million.
SVC said that since 1 July 2026 it has sold one hotel with 133 keys for $18.4 million. It has agreed terms or signed contracts to sell 13 hotels with 2,589 keys for $98.4 million, with closings expected in the second half of 2026. One further hotel with 300 keys is being marketed for sale.
Analyst reception and the next date
Bisnow and The Real Deal quote B. Riley Securities analysts writing that there is a limited chance that this transaction will be completed. Both publishers report Craig Kucera of Lucid Capital Markets estimating $535 million as the cost of exiting SVC's agreement with Sonesta, the largest operator of the portfolio.
Bisnow reported that SVC has until Friday 16 October 2026 to respond. The trust's own news page carries no further statement on the proposal since 9 October 2026.