Goldman Sachs' private equity arm is evaluating the potential sale of B&B Hotels, with a deal possibly valuing the hotel chain at around €3.5bn ($3.78bn), reported Bloomberg, citing people familiar with the matter.

Advisers from Goldman Sachs and Morgan Stanley are gauging interest from hospitality groups and private equity bidders for the European budget hotel chain.

B&B Hotels, which opened its first location in France in 1990, completed €1.25bn refinancing earlier this month, stated the sources.

The sale process is in the preliminary stages, and there's a possibility that Goldman Sachs could retain ownership if the bids do not meet expectations.

The hotel chain operates more than 770 properties, primarily in France, Germany, Italy, and other European nations.

Since 2022, B&B Hotels has expanded by more than 170 new hotels and intends to continue growing in the current year.

Goldman Sachs acquired the company from private equity group PAI Partners in 2019, with the transaction valuing B&B at €1.9bn.

The transaction constituted the fourth exit from the PAI Europe VI fund, while the other three exits included the DomusVI, Innovista Censors, and Konecta.

Last year, B&B HOTELS announced its entry into the US market, targeting Florida and Texas as key initial markets.

The brand aims to establish 400 hotels in the US.

B&B Hotels US CEO Valerio Duchini said: “We are thrilled to bring B&B HOTELS to the United States and to offer travellers affordable high-quality accommodations. We also look forward to connecting with real estate investors in the United States who seek to partner with us on our high growth trajectory.”