Minor International launches NH Hotel Group takeover bid

Minor International launches NH Hotel Group takeover bid

Minor International has reached an agreement with HNA Group to purchase an equity stake of 25.2 per cent (on a fully-diluted basis) in NH Hotel Group in a two-tranche transaction valued at €619 million.

The purchase follows the hotel group’s earlier purchase of a 9.5 per cent shareholding.

Minor also confirmed that it will follow Spanish regulations as applicable to launch an all-cash public tender offer to acquire NH Hotel Group’s remaining shares.

Such offer would be at a price not lower than Minor’s highest acquisition price in the last 12 month-period, currently €6.40 per share (subject to fair price adjustments).

Minor targets its shareholding in NH Hotel Group at around 51-55 per cent and intends to keep NH Hotel Group as a publicly-listed company on the Madrid Stock Exchange.

ADVERTISEMENT

Based on the target ownership level, the acquisition will be funded through debt instruments, while 2019E interest-bearing-debt to equity ratio is expected to be maintained at a comfortable level of 1.3x.

“Today we are embarking on a new era, driving investment strategy to further cement our footprint in the European hospitality industry,” said Dillip Rajakarier, chief executive of Minor Hotels.

“We will be able to create a network of over 540 hotels with a reach across Asia, Oceania, the Middle East, Africa and Europe, all of which are important hospitality regions around the world.

“The business network will allow the two companies to capitalise on our leadership positions in key growth areas, highly complementary asset and brand portfolio, technology platform and talented employees.

“Minor can also support the NH Hotel Group with its food and beverage expertise where appropriate to enhance customer experience and maximise revenue potentials.

“Together, we will be well-positioned to achieve greater success, provide greater value to customers and create more exciting growth opportunities than either company could achieve alone.”

The share purchase from HNA Group will be in two tranches.

The first tranche of 65.85 million shares, representing 16.8 per cent shareholding on a fully-diluted basis, will be completed on or around June 15th.

The second tranche, consisting of 32.94 million shares or 8.4 per cent on a fully-diluted basis, is expected to be completed in September 2018.