TKO LLC said it has submitted a formal written offer to acquire the entire hospitality portfolio of Service Properties Trust (SVC) for $2.0 billion in cash, according to PR Newswire. The announcement was dated Oct. 9, 2026, and issued from Aberdeen, S.D., according to PR Newswire. TKO described the proposed transaction as an all-cash transaction that would be subject to execution of definitive documentation and customary closing conditions, according to PR Newswire.
Offer terms and stated positioning for SVC
TKO said the proposed transaction would provide SVC with immediate liquidity to support meaningful debt reduction and enable SVC to focus on its net lease retail platform, according to PR Newswire. TKO said it believes the offer delivers value to SVC shareholders by “crystallizing” the hotel portfolio’s worth at a premium to its implied market valuation while eliminating operational complexity and capital intensity inherent in hospitality assets, according to PR Newswire. Jim Koehler, CEO of TKO, said TKO has “tremendous conviction” in the long-term value of SVC’s hotel portfolio and believes TKO is positioned to unlock its potential, according to PR Newswire. Koehler said the acquisition would represent a “transformational opportunity” for TKO and that TKO is prepared to move swiftly to bring the transaction to fruition, according to PR Newswire.
Market data and valuation framing cited by TKO
TKO said SVC common shares closed at $6.49 per share on Oct. 6, 2026, and that this represented a decline of more than 50% over the trailing twelve-month period, according to PR Newswire. TKO said the proposed $2.0 billion purchase price for the hotel portfolio alone exceeds SVC’s entire current public market capitalization, according to PR Newswire. TKO said that, as long as both the net lease and hospitality platforms remain on a single balance sheet, the hotel portfolio would continue to dictate SVC’s cost of capital and constrain SVC’s ability to unlock shareholder value, according to PR Newswire.
Net lease platform metrics and stated strategic rationale
TKO said SVC’s 745-property net lease portfolio generates more than $500 million in annual EBITDA, and characterized the business as having predictable cash flows, minimal capital requirements, and operational simplicity, according to PR Newswire. TKO contrasted this with hospitality assets, which it described as capital-intensive, operationally complex, and subject to cyclical volatility, according to PR Newswire. TKO said SVC management has articulated a strategy of selective portfolio streamlining rather than a complete exit from the lodging sector, according to PR Newswire.
Debt reduction estimate and interest-rate commentary
TKO said transaction proceeds would enable SVC to retire more than 40% of its outstanding indebtedness while preserving the retained net lease platform, according to PR Newswire. TKO said that given current and projected interest rate conditions, SVC’s existing weighted average cost of debt is unlikely to be replicated in future refinancing transactions, according to PR Newswire. Widely known context is that a “net lease REIT” typically leases properties to tenants under long-term contracts that shift many property-level costs to tenants, while hotel portfolios generally require ongoing operating and capital decisions by owners.
