Scandinavian property companies Pandox and Eiendomsspar have agreed to buy Ireland's largest hotel group Dalata Hotel Group for €1.4 billion, the companies said today.
Dalata shareholders will get €6.45 in cash per share, representing a premium of about 12% to the closing price on June 2 - the day before the Scandinavian hotel investors first disclosed their interest in the Irish company.
Dalata had rejected an initial proposal in early June from Pandox and Eiendomsspar, valuing it at €1.3 billion, saying that the price undervalued the group.
The latest offer, which has the backing of the board, concludes the Dublin-based company's strategic review that was launched in March to drive up shareholder returns.
The cash offer of €6.45 per share also represents a 35.5% premium to the Dalata share price before the launch of its strategic review and formal sale process in March and a 49.7% premium to the 12 month volume-weighted average Dalata share price.
Sweden-based Pandox will own 91.5% of the entity taking over Dalata, while Norway-based Eiendomsspar will own 8.5%, the companies said in a statement.
Pandox's long-term operating partner, Scandic Hotels Group AB, will become an operating partner for the existing Dalata portfolio, they added.
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.
The Dalata Board said it believes the acquisition is in the best interests of Dalata shareholders and represents the most effective route to enhance value for shareholders, relative to Dalata's other strategic options which have been considered as part of its strategic review.
Dalata said it will retain its staff, management team and Dublin headquarters as it continues to expand as an international hotel group.
Dermot Crowley, CEO of Dalata, said the deal represents an exciting new chapter for Dalata in which it will become part of a larger hotel platform and will further accelerate its growth.
He said the deal was a "very good fit" as it gives Pandox a large portfolio in Britain and Ireland, and Dalata better access to capital and a larger platform to accelerate growth.
Dalata will continue to target new properties in the United Kingdom and Western and Southern Europe, he added.
"Our focus remains firmly on our people and our customers. I'm proud to continue to lead our team in close partnership with our new owners. Together, we will unlock new opportunities for the Clayton and Maldron brands as we continue to expand as a leading international hotel company," the CEO added.
John Hennessy, Chair of Dalata, said that after a thorough and rigourous strategic review, incorporating a formal sales process, the board has determined unanimously that this transaction delivers compelling value and represents the best available strategic option for shareholders.
"We believe that it is the right path forward for all stakeholders, and that it positions the business strongly for its next phase of growth under new ownership," the said.
"The value achieved reflects the hard work and professionalism of the exceptional people working in Dalata now and in the past, and we extend our sincere gratitude to everyone in the Dalata Group and to all who have contributed to the journey so far. We look forward to the company's continued success into the future," he added.
Pandox CEO Liia Nõu said the portfolio consisted of "well-established and highly profitable four-star hotels in strong locations" that would increase its footprint in key markets.
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.
Dalata shares were lower in Dublin trade today.
