Hyatt Loses NH Hotels Bid

Hyatt on Friday expressed interest to enter a bid to acquire Spanish hotelier NH Hotels that operates 370 hotels in 30 countries.

NH Belvedere

Minor International that had launched takeover bid earlier made an announced that they now control 44% NH Hotels share capital making Hyatt’s bid practically impossible or very expensive.

Here’s statement from Hyatt:

Mark Hoplamazian, President and CEO, Hyatt Hotels Corporation:

“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. 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 the disclosures that were made by NH Hotel Group’s largest shareholder shortly after the submission of our letter of interest, we believe that the path to a successful tender offer by Hyatt has now narrowed to a point of being impractical. Absent a significant change in facts or circumstances, Hyatt has determined that pursuing a tender offer is not viable at this time.

We have communicated to NH Hotel Group’s Board that we remain willing to engage in a dialogue with them 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 restructure NH Hotel Group’s assets, while leveraging Hyatt’s considerable brand strength and global presence.”

Here’s an excerpt from Reuters (access their piece here):

Minor already owns 29.8 percent with agreements in place to buy Chinese conglomerate HNA’s 8.4 percent holding and Oceanwood Capital Management’s 5.7 percent stakes. It said late on Friday it had control over 44 percent of NH’s share capital.

Shares in NH dropped 6.4 percent on Monday to 6.3 euros per share, slightly below Minor’s offer price.

Minor had agreed to pay HNA 622 million euros for a 26.5 percent stake in the hotel group, taking its stake to around 38 percent after the conversion of some bonds to shares. It would then offer 6.4 euros for each remaining share, it said.

Conclusion

Trying to grow organically without any acquisitions takes very long time and Hyatt simply needs more properties where people travel. The number of hotels that they currently have just doesn’t cut it compared to Accor, Hilton, IHG and Marriott/SPG.

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