28 August 2018
The alliance to incorporate the subsidiary of Apple Leisure is frustrated in the middle of the Thai firm’s takeover bid.
The strategic alliance between the NH Hotel Group and the US-based Apple Leisure Group to jointly operate holiday hotel complexes in Europe, announced last May, has ground to a halt in the middle of the Thai group Minor’s takeover bid for 100% of NH.
Market sources explain that Minor’s participation in the firm, where it already controls 44.75% of the capital, has brought the alliance, which should have been signed at the end of last July, to an abrupt end.
The agreement involved the arrival of AMResorts, one of the subsidiaries of the US holding company, in Europe and opened the door for NH to expand in the holiday segment together with the North American company. The alliance was another step in the relationship that AMResorts had maintained with NH since 2011 when both companies established a similar model to operate three complexes in the Dominican Republic.
Under the agreement, currently halted, AM Resorts would have been in charge of brand management and the marketing of the resorts, while NH would maintain operational management. The first complexes in Europe were scheduled to open during 2019.
The American group planned to market three hotels with the AMResorts brand in Lanzarote, Fuerteventura and Mallorca from 2019. These hotels are owned by Hesperia and are managed by NH.
“The resorts will be brand conversions of existing hotels, which will be remodelled to adopt the standards of the AMResorts brands with which they will operate,” the companies indicated at the time.
Also, the alliance envisaged a greater partnership when evaluating “additional opportunities for conversions and new constructions,” that would allow the expansion of AMResorts in Europe and NH to extend its footprint in vacation resorts.
However, Minor’s participation in NH has put an end to the agreement.
The Thai group controls 1,75516,807 shares of NH, equal to 44.75% of the share capital of the Spanish firm and has launched a takeover bid for the rest, although it intends to control between 51% and 55% of NH and keep the group listed.
After the takeover by Minor, NH contracted Bank of America Merryl Lynch to evaluate the offer and look for alternatives.
So far, no white knight has appeared at NH’s door, except for Hyatt, which, despite having expressed interest in the Spanish network, has ruled out a counter-takeover bid, believing that the operation has little prospect of success with Minor controlling more than 44% of its capital.
The Thai group’s bid was accepted by the CNMV on July 19. After the approval of its shareholders and once the market’s supervisory body approves the deal, Minor expects to complete the transaction in October 2018.
Original Story: Expansion – Rebecca Arroyo
Translation: Richard Turner