Elegant Hotels Group PLC (LON:EHG) has announced that it held discussions regarding a takeover approach from Spain’s Melia Hotels International SA but that these have now been terminated and Melia Hotels does not intend to make an offer.
In a statement, the AIM listed group - which owns and operates seven freehold hotels and resorts in Barbados - noted recent press speculation concerning the possibility of an offer being made for it.
The firm said the possible all-cash offer would have been made by Melia Hotels or one of its investment affiliates.
Back in October, Elegant Hotels revealed that trading since its interim results in June had remained in line with market expectations, with bookings ahead of the same period last year after 12 days of its new financial year.
The group also confirmed the Treasure Beach hotel, which it acquired in in May, is "on track to reopen for business at the start of the peak tourist season".
In afternoon trading, shares in Elegant Hotels were 3.6%, or 3p higher at 86.5p.
Bid "highly opportunistic" in Liberum's view
In a note to clients, analysts at Liberum Capital commented: “The proposed bid that was reported in the press this weekend was at a rumoured £100m. On our calculations this puts the offer at a discount to NAV and our NAV is very prudent indeed. “
They added: “This was highly opportunistic in our view and truly does show just how cheap the Group is in our view.”
“The market share the group commands on Barbados, its sales & marketing office and its significant asset-backing all support a much higher valuation let alone the opportunity to see material earnings upgrades over the next few years,” the analysts concluded.
-- Adds share price, analyst comment --