UPDATE 2-Colony's Bazin takes reins at French hotels group Accor
* Accor names Bazin as Chairman and CEO
* Bazin to leave Colony Capital
* Expected to pursue more aggressive strategy
PARIS, Aug 27 (Reuters) - Accor has named private equity specialist Sebastien Bazin as the French hotel group's new chairman and chief executive in a move expected to speed Accor's asset sales to boost investor returns.
The appointment of Bazin, who has ended all his duties as head of European operations for U.S. investment fund Colony Capital, Accor's largest shareholder, was made at a board meeting on Tuesday morning.
Accor, which competes with global rivals InterContinental , Marriott and Starwood, has been divided over how aggressively to conduct its strategy of expanding in emerging markets to cope with a weak Europe while accelerating its move toward franchising or managing hotels for others to bolster profit margins.
Potential disposals mainly involve hotels, with the company banking on its strategy to bolster its operating margin to more than 15 percent of sales by 2016, from 9.3 percent at the end of last year.
Accor wants to operate 40 percent of its rooms under franchise contracts, 40 percent under management contracts and 20 percent in owned and leased hotels by the end of 2016.
Bazin, who was also Accor's vice-chairman, will assume his CEO duties with immediate effect, Accor said in a statement confirming a report by Reuters.
"I take on this new role with great ambition for the group, to which I am deeply committed, and acute awareness of the challenges it currently faces," the statement quoted Bazin as saying.
Bazin, a French national, became vice-chairman in April after the world's fourth-largest hotel group by sales ousted Chairman and Chief Executive Denis Hennequin and put in charge a transition-management team, promoting Chief Operating Officer Yann Caillere as interim CEO.
Caillere, who had been tipped as a possible candidate for the CEO job, is to leave the group, Accor said.
Bazin, 51, is leaving Colony after 16 years with the $27 billion U.S. private equity firm.
"He knows Accor and the hotel business inside out, and for him it's a personal challenge to jump to the operational side," a source close to the matter said.
Colony invested 1 billion euros ($1.34 billion) in Accor in 2005 and was joined in 2008 by French private equity fund Eurazeo. Together they control 21.4 percent of the group and four board seats. Colony directly owns about 11 percent of Accor.
The U.S. firm is also a key shareholder of Carrefour , Europe's largest retailer, where Bazin, who acts as vice chairman of the board, was believed to be behind a failed plan to spin off the company's property assets from the rest of the business.
Colony's close involvement in both companies has often been blamed by unions and local investors for fostering management upheaval and short-term thinking.
Accor shares gained more than 2 percent in early trade and were up 0.21 percent at 1120 GMT, against a 1.5 percent decline in the CAC-40 French blue-chip index.
Bazin has strong expertise in the property and hotel businesses. Before joining Colony, he was General Manager of French property group Immobiliere Hoteliere.
"The key issue is that Accor's asset-light strategy of selling assets and developing its franchise will continue and even accelerate as Colony and Bazin initiated that strategy," said one sector analyst who declined to be named.
Colony masterminded the separation of Accor from its vouchers business Edenred in 2010 and the latter's successful listing.
Former Accor CEO Hennequin was said to have resisted pressure from its top shareholders - notably Colony - to split property holdings from the hotels business.
At the time of Hennequin's ousting, sources said that stakeholders were losing patience with the weak performance of Accor shares and wanted to speed asset sales and franchising to boost returns.
Since news of Hennequin's ousting broke on April 23, Accor's shares have risen 15.3 percent, outperforming its peers.
In a Reuters interview in May, Colony Capital's Chief Executive Thomas Barrack defended Accor's ousting of its CEO, saying that Hennequin had to answer for weak results and below-par stock performance. He also said that one of the key challenges for the company was also to respond to competition from online booking agencies such as Expedia.
Accor will unveil its first-half earnings on Wednesday.