Shares in Irish hotelier Dalata Hotel Group PLC (LSE:DAL) were rising in Tuesday’s early deals after a takeover offer was announced by European property firms Pandox and Eiendomsspar.
Pitched at €6.05 per share, valuing the hotel chain at €1.3 billion. It represents a 27.1% premium to the Dalata price in early March, or 13.6% to Monday’s closing price.
Dalata, operator of the Maldron and Clayton hotel brands, put itself up for sale back in March via a formal process.
The London-listed, Irish hotel operator rejected the approach, stating that it "materially undervalues the group and its prospects”, and adding that Pandox previously declined to participate under the terms of the formal sale process.
Eiendomsspar, a Norwegian property investor, already owns 8.8% of Dalata and will be a part-owner of a new joint vehicle if the transaction proceeds, whilst Pandox sees the deal as an opportunity to grow its European hotel property portfolio, which currently comprises 163 hotels across 11 countries.
The European bidders note that Dalata’s formal sale process is ongoing, but they have not engaged in that process and their bid has been submitted independently.
They want to engage constructively with the Dalata board and management to secure a recommendation of the offer.
The investors added that they’re in talks with ‘a reputable European hotel operator’ over a framework agreement to operate the Dalata properties should a deal be concluded.
“The consortium believes the proposal would deliver tangible and certain value for Dalata shareholders, fully in cash and at a meaningful premium,” the investors said in a joint statement.
“As established hotel investors with deep knowledge of the European hospitality sector, and experience from successfully executing similar transactions in the UK and Ireland, the consortium is well-positioned to support Dalata's business and long-term growth ambitions.”
In London, Dalata shares were up 10.8%, changing hands at 520p.