European corporate pulls out of deal to buy €110m of shares in Hotel Group
By Maurice Garvey
A EUROPEAN corporate has decided not to proceed with the purchase of €110 million worth of ordinary shares in the Dalata Hotel Group, which is the biggest hotel operator in the Republic.
The Dalata Hotel Group operate all Maldron and Clayton brands in Ireland. It’s revenue rose 9.3 per cent to €429.2 million during the year that ended on December 31, 2019.
The Maldron Hotel in Tallaght
However, while the group has said 2020 would be marginally ahead of expectations, the ongoing pandemic and difficult trading conditions within the industry, have led to an uncertain outlook for 2021.
In a note to investors via the London Stock Exchange last week, JP Morgan said it was recently engaged by the European corporate to act as dealer-manager to intermediate the purchase of the financial investment.
It said the European corporate in question has multiple minority holdings and sought to purchase the shares at a price between €3.50-€3.75 before shares closed at €3.37 on February 11.
In a note the following day, Goodbody analyst Paul Ruddy said that had the buyer been successful, it would have purchased about 29-31 million shares in Dalata, or 13-14 per cent.
“The indicated buying range would represent a 1-8 per cent premium to the year to date average closing price and a 12-20 per cent premium to the year to date lows,” he said.
“Although a transaction did not take place, we believe this is supportive of valuation given there was new buyer interest and also because it would appear that sufficient existing shareholders were unwilling to sell at those levels.
“From a wider UK and Ireland leisure perspective, buyer interest appears to be ramping up with Platinum Equity Partners launching an unsuccessful £665 million takeover bid for Marston’s and former Greene King CEO Rooney Anand launching a fund to purchase UK pub assets.
“We recently updated Dalata forecasts to reflect the continued Covid related restrictions, and remain positive on it as a recovery play.”
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