A US$375 million deal between Hospitality Properties Trust (HPT) and NH Hoteles is not moving forward because NH Hoteles was unable to obtain necessary approval from one of its lenders.
Spanish daily El País reported that the Royal Bank of Scotland was the only bank among 33 that did not approve the US$730 million in debt financing related to the deal.
HPT said it expects to enter into discussions with NH Hoteles about possible modifications or alternatives to the transaction originally announced, but at this time the outcome of any such discussions is uncertain.
“We do not believe the proposed deal with HPT is dead. Though management is unable to comment extensively on the ongoing situation, we believe the setback only means the deal will no go forward as currently written. We believe the syndicate, NH or HPT could cover the relatively modest shortfall left by the bank, Additionally the deal could be reworked, perhaps in a more limited scope,” said David Loeb, an analyst with R.W. Baird & Co.
Under the nixed deal, HPT was set to purchase hotels in Mexico, Colombia, Uruguay and Chile for US$70 million to Hospitality Properties Trust. It did not specify which hotels it was selling. At the same time Hospitality Properties Trust, Newton, Massachusetts, agreed to provide a €170 million (US$223 million) loan to NH Hoteles. NH Hoteles, Madrid, also announced a joint venture purchase with HPT to buy the 242-room NH Jolly Hotel Madison Towers located in New York City.