Minor International has set the stage to acquire Spain’s NH Hotel Group after reaching an agreement with HNA Group to increase its equity stake in the company by 25.2% on a fully diluted basis.
The new stake, which knocks Spain’s Grupo Barcelo out of the running for NH, is valued at €619 million (US$724.0 million). That brings Minor’s total proposed stake to 38%, which triggers Spanish regulations to launch a full takeover bid.
“Today we are embarking on a new era, driving investment strategy to further cement our footprint in the European hospitality industry,” said Dillip Rajakarier, CEO of Minor Hotels, according to a statement. “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 capitalize on our leadership positions in key growth areas, highly complementary asset and brand portfolio, technology platform and talented employees.”
Minor’s bid values the Spanish hotel group at up to €2.50 billion (US$2.90 billion); it said in a filing with the Spanish market regulator that it will offer €6.40 (US$7.49) for each remaining share in the company.
HNA’s sale, prompted by a restructuring to sell assets to raise cash, will take place in two stages: a 17.6% stake is expected to close on June 15, and when that is completed, it would sell a further 8.8%.
The deal is expected to close in September and would close a bumpy chapter for the Chinese company, which came under scrutiny by its government and has been, along with other Chinese hotel investors, squeezed to sell off its holdings in foreign companies. And NH knocked HNA’s representatives off its board after asserting that HNA’s 2016 purchase of Carlson Rezidor Hotel Group was a conflict of interest.
Minor said it intends to keep NH Hotel Group, which has 382 hotels in 30 markets in Europe, the Americas and Africa, as a publicly listed company on the Madrid Stock Exchange.