Thai Minor International Buys €192mn Stake in Spain’s NH Hotels

Date: May 2018

Location: Spain, with 382 hotels throughout Europe and LatAm (30 countries).

Name: NH Hoteles

Seller: British investment fund, Oceanwood, HQ in Bangkok.

Buyer: Thailand’s Minor International Pcl acquired a stake in Spain-based NH Hotel Group SA for 192 million euros ($225.79 million) to grow its hospitality footprint in Europe.

Minor International will take an 8.6 percent stake in the 382-hotel European chain.

The acquisition was funded through bank loans. Minor was advised by Evercore and by legal firm Baker, whilst Oceanwood were advised by Garrigues.

“The investment is financially attractive, with high liquidity on the Madrid Stock Exchange and proven performance by the business,” Chief Executive of Minor Hotels, Dillip Rajakarier, said in a statement.

Minor own 161 hotels in 26 countries with its own brands as well as under Four Seasons, Marriott and St. Regis, as well as its stake in London’s Corbin & King.

NH Hotels was benefiting from the improving European economy, Rajakarier said, adding that hotels in Spain, Benelux, Central Europe and Italy would be main growth drivers.

Minor, which also operates restaurants in Asia, could “support the NH hotels with its food and beverage expertise,” Rajakarier said.

The acquisition is the latest in Minor’s growing hospitality portfolio. In 2016, the company bought Portugal’s Tivoli Hotels for $320 million.

THPT Comment: So China’s HNA in January 2018 were forced by the Chinese government to to hire banks to look for buyers of its majority stake in Spain’s NH Hotel Group (NHH.MC), just days after NH turned down a takeover offer from Spanish peer Barcelo.

The purchase of this share package makes Minor NH’s third-largest shareholder, behind the Chinese holding company NHA, with a 29.5% stake and Grupo Hesperia, in the hands of the businessman José Antonio Castro, with 9%.

Oceanwood will continue as the fourth-largest shareholder, with almost 5%, although it will strengthen its weight after exercising the conversion rights of a convertible bond that it subscribed to five years ago and which it will execute soon.

The fund first invested in NH in 2013 by purchasing stakes owned by the savings banks and has grown its share over the last few years.

The announcement also came a day after Reuters reported that the U.S. government would not approve any HNA investments in the United States until the Chinese aviation-to-property conglomerate provides adequate information on who its shareholders are.

HNA said it had hired JP Morgan and Benedetto, Gartland and Company to look for possible buyers of its 29.5 percent stake in Spain’s NH Hotel Group (NHH.MC). The stake is valued at around 632 million euros at current prices.

Spain’s hotel industry is booming and investment in the sector reached a record 3.9 billion euros ($4.8 billion) in 2017, according to property consultant Irea.

In 2017, Spain overtook the United States to become the second most visited country in the world after France, with the number of tourists boosted by security concerns in some rival markets in the Middle East and North Africa.

Heavily indebted HNA Group have had an acrimonious relationship with NH. Its representatives were ejected from NH’s board in 2016 after HNA’s purchase of rival hotel group Carlston-Rezidor led to accusations of conflict of interest.

Earlier this year (2018) NH, with nearly 400 hotels in 30 markets and a focus on city stays, rejected Barcelo’s offer, saying it undervalued the company. However, NH did not rule out taking part in any consolidation wave in the sector.

NH’s shares were little changed following the HNA statement, trading 0.5 percent higher at 6.1 euros. Its share price has risen by more than a fifth since Barcelo’s approach in November.

First Seen: Reuters