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Corinthia to buy neighboring Malta hotel company

Malta-based International Hotel Investments (IHI), the investment arm of the Corinthia Group, has entered into a conditional agreement to acquire Island Hotels Group, which owns two Radisson Blu hotels in Malta. IHI has indicated a tentative value of €106.5 million (US$125 million) and net equity value of Island Hotels Group of €50 million (US$59 million).

“IHI believes that an acquisition of IHGH’s assets, management expertise and businesses will contribute significant synergies, gains and benefits to IHI’s objectives,” company secretary Alfred Fabri said. “These include operational synergies across the board and additional development opportunities that will arise as a result of an amalgamation of IHGH’s hotel operation in St George’s Bay with that of IHI’s own neighboring hotels.”

Both companies are also actively involved in the catering sector, in Malta and overseas, and the acquisition of IHGH’s assets are expected to create efficiencies in existing operations and provide a stronger platform for international growth.

Based on the completion of a satisfactory due diligence, and the indicative value confirmed, IHI has indicated that it would proceed with a voluntary offer for all the shares of IHGH in which the price for IHGH shares would be paid as to €1 in cash (US$1.17), split into two tranches, the first tranche of €0.55 (US$0.58) payable on completion and the second tranche payable 12 months later.

In addition to this cash component, IHGH shareholders will also receive 0.246 IHI shares for each IHG share held, through the issue of 9 million shares by IHI.

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