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Service Properties Trust Confirms $2B Acquisition Proposal from TKO Hotels

Service Properties Trust on Friday night confirmed that it had received an unsolicited proposal from TKO Hotels to acquire the company's hospitality portfolio for $2B in cash. Before receiving the proposal, the company said it had no prior contact from TKO. Service Properties added that its board will "review and consider TKO's proposal in determining the course of action that it believes is in the best interest of the company and its shareholders." The stock in midday trading is down 15%, or $1.07, to $6.08.

TKO LLC Offers $2.0B to Acquire SVC's Hospitality Portfolio

TKO LLC announced that it has submitted a formal written offer to acquire the entire hospitality portfolio of Service Properties Trust for $2.0B in cash. "The all-cash transaction, subject to execution of definitive documentation and customary closing conditions, would provide SVC with immediate liquidity to support meaningful debt reduction while enabling the company to focus on its substantial and highly attractive net lease retail platform. TKO believes this offer delivers compelling value to SVC shareholders by crystallizing the hotel portfolio's worth at a significant premium to its implied market valuation while eliminating the operational complexity and capital intensity inherent in hospitality assets," TKO stated. "The proposed acquisition represents a pivotal opportunity for SVC to accelerate its transformation into a focused, pure-play net lease retail REIT. The market has clearly signaled concerns regarding the retained hotel portfolio: SVC common shares closed at $6.49 per share on October 6, 2026, representing a decline of more than 50% over the trailing twelve-month period. Notably, the proposed $2.0 billion purchase price for the hotel portfolio alone exceeds SVC's entire current public market capitalization. SVC's 745-property net lease portfolio represents an exceptional platform generating more than $500 million in annual EBITDA. This business is characterized by predictable cash flows, minimal capital requirements, and operational simplicity-attributes that command premium multiples in the public markets. By contrast, the hospitality segment is inherently capital-intensive, operationally complex, and subject to cyclical volatility. So long as both platforms remain on a single balance sheet, the hotel portfolio will continue to dictate SVC's cost of capital, constraining the company's ability to unlock shareholder value. TKO acknowledges that SVC's management has articulated a strategy of selective portfolio streamlining rather than a complete exit from the lodging sector. However, TKO submits this proposal because it believes the magnitude and certainty of the all-cash consideration materially exceed the risk-adjusted present value of executing that strategy over a multi-year horizon," TKO added.

Service Properties Shares Rise 18% to $7.37

Service Properties shares are up $1.15, or 18%, to $7.37 in late day trading.