Hyatt Hotels Corporation has sent a letter to NH Hotel Group indicating its interest in taking over the Spanish hotel operator.
In this letter, Hyatt Hotels Corporation says that it believes it will be able to launch a cash offer for the entire share capital of NH Hotel Group at a price higher than the offer made by Minor International, valuing the Spanish group up to 2.5 billion euros.
"We consider that the bidding procedure on the NH stocks underestimates the intrinsic and economic value of the company," says Mark Hoplamazian, Hyatt's CEO, in a statement mail made public by Spanish stock exchange regulatory authorities.
"Hyatt has a demonstrated track record of making strategic investments to extend the reach of our brands and create value for our stakeholders," Mark Hoplamazian, Hyatt’s President and CEO, said in an emailed statement to Bloomberg. "In keeping with our growth strategy, we submitted a letter of intent expressing our interest in pursuing a potential acquisition of NH Hotel Group.”
Around 08:30 GMT, NH Hotel Group stock jumped 7.50% to 6.6650 euros, 3.65% above the proposed price of 6.43 euros per share by Minor International.
The latter is currently the largest shareholder of the Spanish hotel operator with 29.8% of the capital and said in a regulatory filing earlier Thursday that it had raised its stake to 35.55 %. Previously, it entered into agreements to acquire the 8.4% stake of the Chinese conglomerate HNA and the 5.7% of Oceanwood Capital Management.
That deal is conditional on approval from shareholders at an annual general meeting on August 9.
NH Hotel Group, which operates 379 hotels, refused an offer in January 2018 from its compatriot Barcelo that valued it at 2.48 billion.
If the acquisition is approved, Hyatt Hotels Corporation would consolidate its portfolio with a total of 1,107 hotels and 244,185 rooms, moving up two rungs in the 2018 Worldwide Hospitality Ranking. In 11th place, some 46,000 rooms from its Best Western counterpart, a position to which the group did not have access since 2012.
“We believe that marrying NH Hotel Group’s strong footprint in Europe and select other markets with Hyatt’s global presence would yield a powerful portfolio of brands and network of hotels delivering compelling benefits for guests, owners and shareholders of both companies,” Mark Hoplamazian said in his statement. Hyatt is seeking to “conduct additional due diligence to further inform valuation and determine the optimal approach to a potential offer,” he said.
Hyatt would appear to have requested access to NH Hotel Group's accounts before making a final offer which should also be approved by its Board of Directors. The American hotel group might take its final decision during the month of August or at the beginning of the month of September.