Australia’s Coles signs hotel business over to KKR

Grocery chain Coles Group has established a joint venture with KKR through its Australian Venue Co. (AVC) for the management of Coles’ gaming and hotels business.

The A$200 million ($141.84 million) joint venture, named Queensland Venue Co, will be owned equally by Coles and AVC. AVC will manage the day-to-day operations of Spirit Hotels.

Coles has been trying to remove itself from the pubs business in Queensland, but it wants to retain the liquor retail outlets that are attached to these venues, according to local media outlets. However, under Queensland licensing laws, only hotels can manage retail liquor outlets, which prevent Coles from neatly splitting the businesses up. In the joint venture Coles will control the retail outlets and keep the profits from that business, while AVC receives the profits from its management.

There are 87 Spirit Hotels venues that will now be effectively run by AVC, while Coles will retain 243 retail liquor stores in Queensland