Just a few days after announcing its interest in the acquiring Spain’s NH Hotel Group, Hyatt Hotels Corporation is scrapping its plans.
Mark Hoplamazian, Hyatt’s president and CEO issued a statement today explaining the company’s about-face, noting that the “path to a successful tender offer by Hyatt” had narrowed to the point of being impractical.
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“On July 26, 2018, Hyatt delivered a letter to the Board of Directors of NH Hotel Group in which we expressed our interest in pursuing a potential acquisition of NH Hotel Group with a separation of their real estate assets from their hotel management platform,” explained Hoplamazian. “Thereafter, Hyatt submitted a letter to the NH Hotel Group’s Board of Directors, responding to questions the Board asked about our letter of interest.”
After reviewing disclosures made by NH Hotel Group’s largest shareholder, Thailand-based Minor International, which is also pursuing a takeover of the Spanish hotel company, Hyatt decided to bow out.
“Absent a significant change in facts or circumstances, Hyatt has determined that pursuing a tender offer is not viable at this time,” Hoplamazian said.
Bloomberg reported that Hyatt’s offer came too late in the game.
Minor International, already NH’s biggest shareholder, made an offer in June. That deal valued the portion of the Spanish hotel group not already owned by Minor at 1.64 billion euros. The acceptance of Minor’s offer is conditional upon approval from NH Hotel Group shareholders.
After Hyatt made its intentions regarding NH Hotel Group public last week, an executive at rival Minor International was quoted as saying “Hyatt has entered the church and the bride has already left. Our reaction is to continue and complete this transaction.”
Hyatt however, has not completely walked away from the table. The company said it remains willing to engage in dialogue with NH Hotel Group to “discuss other potential avenues toward unlocking value for NH Hotel Group’s shareholders.”
“We believe that a higher value could be realized by NH Hotel Group’s shareholders if there were an agreed commitment and path to restructuring NH Hotel Group’s assets while leveraging Hyatt’s considerable brand strength and global presence,” Hoplamazian said.
NH Hotel Group includes more than 370 hotels in 30 countries. In January, the hotel group rejected a takeover offer from Spanish peer Barcelo, which valued the company at 2.48 billion euros.
