TKO offers $2 billion cash for the SVC hotel portfolio
TKO LLC has put a formal written offer to buy the entire hotel portfolio of Service Properties Trust for $2.0 billion in cash. TKO says the price exceeds the trust's whole stock market value. The trust confirmed the approach the same day. Its board of trustees will review it.
The offer
TKO put the offer in writing in a statement dated 9 October 2026. Payment is all cash. The deal remains subject to negotiation, to approval by the trust's board, to execution of definitive documentation and to customary closing conditions. TKO is based in Aberdeen, South Dakota.
Jim Koehler, chief executive of TKO, called the hotels "an exceptional collection of hospitality assets across prime markets". He said the company is "prepared to move swiftly and decisively to bring this transaction to fruition".
TKO framed the bid as a separation. The proceeds would let Service Properties Trust retire more than 40 per cent of its outstanding debt. What stays behind is a net lease retail platform.
What SVC said
The trust answered within hours. It called the approach unsolicited. Before the offer arrived, the trust said, it "had no prior contact from TKO".
The board of trustees "will carefully 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 trust said.
The trust set no timetable and gave no view on the price. It has filed nothing with the US Securities and Exchange Commission on the proposal. Its most recent filing is dated 17 September 2026. Service Properties Trust has scheduled its third quarter conference call for Thursday 5 November.
The portfolio on the block
Service Properties Trust is a real estate investment trust with $9.7 billion invested across two asset classes. At 30 June 2026 it owned 745 service-focused retail net lease properties with more than 13.5 million square feet across the United States. It also owned 93 hotels with more than 21,000 guest rooms in the United States, including Puerto Rico, and Canada.
At $2.0 billion, the hotels work out at roughly $95,000 a room. The trust is managed by The RMR Group, which reported more than $37 billion under management at 30 June 2026. Service Properties Trust is headquartered in Newton, Massachusetts.
The share price behind the pitch
TKO built its case on the trust's market value. It said the shares closed at $6.49 on 6 October 2026 and had fallen more than 50 per cent over the trailing twelve month period.
Nasdaq closes put the stock at $12.70 on 6 October 2025 and $6.49 on 6 October 2026. That is a decline of 48.9 per cent from close to close. The fall from the $13.238 intraday high of 6 October 2025 to the 6 October 2026 close is 51.0 per cent.
The trust's 10-Q reports 129,509,488 common shares outstanding at 3 August 2026. At the 6 October close that is a market value of about $841 million.
The shares did not hold the gain. They closed at $6.22 on 8 October and jumped to $7.15 on 9 October, the day the offer landed. They then fell to $5.93 on 12 October and $5.925 on 13 October. The stock closed at $6.19 on 15 October, below the pre-offer level.
Analysts split on whether it closes
Analysts at B. Riley Securities wrote of "a limited chance that this transaction will be completed". They cited the absence of public data on TKO and no track record on a deal of this size.
Craig Kucera of Lucid Capital Markets estimated $535 million to exit the management agreement with Sonesta, the trust's largest operator.
Trade coverage reports the trust's hotels run under Hyatt, Radisson and IHG alongside Sonesta, and that TKO wants the properties free of brand management agreements and franchise obligations. The trust's portfolio was 52.1 per cent net leased assets at the end of the second quarter. Trade coverage also reports the letter is dated 7 October and was released on 9 October, and that the trust had until Friday 16 October to respond.
What TKO brings
TKO describes itself as a hospitality investment firm that acquires, repositions and operates hotels across the United States. The Daily Lodging Report put TKO's own holdings at 58 properties with just over 4,000 rooms. The offer covers about five times the rooms the company already owns. TKO's release does not say how the cash would be funded or name the advisers it has engaged.
Both sides agree on one point. Nothing is agreed. TKO said there can be no assurance that definitive documentation will be executed or that the acquisition will be completed on the anticipated terms, timeline or at all.