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The Rezidor’s board opposes to HNA offer

In April 2016, HNA Tourism Group and Carlson Group began negotiations for all of its hotel operations that are under the Carlson Rezidor Hotel Group. The group's acquisition was finalized last December, but the full takeover of the 51% subsidiary, The Rezidor Hotel Group, listed on the Stockholm stock exchange, remained unresolved. The Chinese group made an offer for the last 49%, but Rezidor’s board recommends its shareholders refuse it, considering it insufficient.



The members of the Board of Directors of The Rezidor Hotel Group voted unanimously to recommend that shareholders of the US operator refuse the offer made by the Chinese group HNA, at 3.68 euros per share. On December 22, the Chinese group, through its subsidiary HNA Sweden Hospitality Management AB, launched a takeover bid at 3.68 euros per share, 6.3% below the last closing price of the Rezidor share. The group used the average of the last 20 trading days, thus complying with the legal obligation with a minimalist offer, with no incentive for minority shareholders. Advised by SEB Corporate Finance, Gernandt & Danielsson Advokatbyrå and DNB Markets, the board of the Rezidor Hotel Group recommends refusal of HNA's offer.
This decision is based on a number of factors, including the success of its asset-light management model, the cost control plan (which is expected to generate savings of 10 million euros per year) and measures to standardize interest rates of taxation. All these factors would make it possible to improve the group's profitability in the years to come. In addition, areas of uncertainty exist as to the role reserved for Rezidor within HNA. The Chinese conglomerate has not yet laid out a strategic plan for Rezidor or disclosed the future composition of the board. As a result, the ball is back in HNA's camp to improve its proposal and obtain a new decision from the Board of Directors. However, this does not prevent HNA from overriding the board's opinion. Moreover, in view of the exchange control currently being reinforced in China, the HNA Tourism Group is threatening to extend deadlines for making the funds available if a quick decision is not taken on its current offer. Any postponement could lead to a delay of up to nine more months.
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