All-cash offer provides immediate liquidity and positions SVC for strategic transformation as a pure-play net lease REIT

ABERDEEN, S.D., Oct. 9, 2026 /PRNewswire/ -- TKO LLC ("TKO" or the "Company"), a leading hospitality investment firm, announced that it has submitted a formal written offer to acquire the entire hospitality portfolio of Service Properties Trust ("SVC") for $2.0 billion 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.

"We have tremendous conviction in the long-term value of SVC's hotel portfolio and believe TKO is uniquely positioned to unlock its full potential," said Jim Koehler, CEO of TKO. "This acquisition represents a transformational opportunity for our firm. SVC has assembled an exceptional collection of hospitality assets across prime markets, and we are prepared to move swiftly and decisively to bring this transaction to fruition. Our all-cash offer eliminates financing risk and provides SVC with the certainty it needs to execute a successful strategic repositioning. We look forward to engaging constructively with SVC's Board and management to reach a mutually beneficial agreement."

Strategic Rationale and Transaction Benefits

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. The transaction proceeds would enable SVC to retire more than forty percent (40%) of its outstanding indebtedness while preserving the retained net lease platform-potentially positioning the equity for meaningful market re-rating and enhanced shareholder returns.

Given current and projected interest rate conditions, SVC's existing weighted average cost of debt is unlikely to be replicated in future refinancing transactions. Additional capital may be required for the company to continue servicing its debt obligations, and continued capital expenditures on the hotel assets do not materially improve the company's refinancing trajectory. In TKO's view, SVC's shareholders face a fundamental choice: cash certainty today versus continued reliance on management materially outperforming its historical track record in an environment dependent on substantial interest rate declines.

Transaction Process and Conditions

The proposed 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. There can be no assurance that definitive documentation will be executed or that the proposed acquisition will be completed on the anticipated terms, timeline, or at all. TKO has engaged experienced legal and financial advisors and stands ready to work expeditiously toward execution of definitive agreements.

About TKO LLC

TKO LLC is a hospitality-focused investment company with a proven track record of acquiring, repositioning, and operating hotel assets across the United States. Led by an experienced management team with deep expertise in hospitality real estate and capital markets, TKO is committed to creating long-term value through disciplined investment strategies and operational excellence.

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SOURCE TKO Hotels