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Dalata Hotel Group rejects takeover offer from Pandox consortium

Dalata Hotel Group operates 55 hotels under the Maldron Hotel and Clayton Hotel brands
Dalata Hotel Group operates 55 hotels under the Maldron Hotel and Clayton Hotel brands

Dalata Hotel Group has today rejected a €1.3 billion takeover offer from Scandinavian property companies Pandox and Eiendomsspar.

Dalata, Ireland's largest hotel group, said the consortium's offer "materially undervalues the group and its prospects".

Dalata operates 55 hotels under the Maldron Hotel and Clayton Hotel brands, mostly in Ireland and the UK, and aims to open new hotels in Europe including in Berlin and Madrid.

It launched a strategic review in March to explore options for enhancing shareholder value, including a potential sale.

In a statement this afternoon, Dalata said its board continues to engage in constructive discussions with a number of parties who are participating in the Formal Sales Process (FSP) and who have submitted initial non-binding proposals to acquire the entire issued and to be issued share capital of the group.

It added that Pandox is not a participant in the FSP, having declined to enter the process on the terms of the process set out in the group's announcement on March 6.

Dalata said it remains committed to its ongoing Strategic Review and FSP and a further announcement will be made in due course as appropriate.

It also advised shareholders to take no action in relation to the Pandox possible offer.

The bid proposal comprised a cash offer of €6.05 per ordinary share of Dalata, representing a premium of about 5% to Dalata's closing price yesterday.

Dalata's CEO Dermot Crowley

Norway-based Eiendomsspar is the second largest shareholder in the Irish group with a stake of around 8.8% and in Pandox, in which it has a stake of around 8.5%.

Pandox and Eiendomsspar have until July 15 to make a formal offer for Dalata or walk away, under Irish takeover rules.

Dalata's adjusted core profit rose 5.1% last year to €234.5m as revenue grew 7.3% to €652.2m, driven by additions to its portfolio over the past two years.

At its Capital Markets Day last year, Dalata outlined its "2030 Vision" strategy, aiming to expand its portfolio to 21,000 rooms across Ireland, the UK and Continental Europe.

Sweden-based Pandox specialises in the ownership, development and leasing of large hotel assets in major cities across Sweden and northern Europe.

It has been expanding its portfolio through acquisitions and leases in key European cities including Stockholm, Berlin and Brussels and its portfolio consists of 163 hotel properties with about 36,000 rooms across 11 countries in Northern Europe.

Eiendomsspar is one of the largest real estate owners in Norway and it owns 11 hotels in Norway, with another two hotels under construction. Eiendomsspar controls about 36% of the voting shares of Pandox.

Shares in the company closed 5.5% higher in Dublin trade today.