Hesperia Acquires La Manga Resort from the Arum Group

31 July 2019

Hesperia Investor Group has reached an agreement with the Arum Group to acquire a controlling stake in the La Manga Club luxury resort. The 560-hectare resort is a tourist and residential complex with extensive sports and golf facilities and until now, was a part of the portfolio of assets of Inmogolf, a company linked to Arum. The two firms declined to reveal details of the transaction.

La Manga Club has a 192-room, five-star hotel, the Prince Felipe, which has a wide range of amenities, including an outdoor pool, gym, meeting rooms, a children’s club and playground, and an array of bars and restaurants. Also, the resort has 200 4-star flats for family vacations, with two swimming pools and restaurants. The residential complex also hosts a 2,000-m2 wellness centre, with thirteen treatment rooms, saunas, steam rooms, a training centre for athletes and a gym with a 25-meter indoor pool. The club itself has an enviable location, with three golf courses, facing the Mar Menor, the Mediterranean Sea and next to the Calblanque Natural Park.

La Manga Club will now join Hesperia’s portfolio of assets (both owned and managed), consisting of more than 5,000 rooms, 29 hotels, six resorts on the Peninsula and the Balearic and Canary Islands, along with 23 hotels in Spain’s principal cities.

The Arum Group, through its subsidiary Inmogolf, will continue to manage La Manga Club’s real estate business.  In turn, Hesperia is planning a series of investments to make La Manga the premiere resort in southern Europe.

Original Story: Cinco Dias

Adaptation/Translation: Richard D. K. Turner

Thai Hotelier Minor Acquires 8.6% of NH from Oceanwood

23 May 2018 – Expansión

The Thai hotel company Minor Hotels Group has entered the shareholding of NH Hotels with the purchase of a package of 30 million shares, representing 8.6% of the Spanish hotel chain’s share capital, from the British investment fund Oceanwood for around €190 million, as revealed by Expansión.

The agreement reached between Oceanwood and the company headquartered in Bangkok has been closed for a price of €6.40 per share, slightly above NH’s share price at the end of trading yesterday (€6.35). The hotel chain’s share price has appreciated by 5.83% so far this year. Evercore has been the advisory bank to Minor. On the legal, Baker has advised the Thai firm whilst Garrigues has advised Oceanwood.

Minor, whose shares are listed in Bangkok, has a market capitalisation of USD 6 billion and owns 161 hotels in 26 countries. The chain is the owner of the brands Anantara, Avani, Elewana, Oaks and Tivoli and also operates establishments owned by the chains Four Seasons, Marriott and St. Regis.

The purchase of this share package makes Minor NH’s third-largest shareholder, behind the Chinese holding company NHA, with a 29.5% stake and Grupo Hesperia, in the hands of the businessman José Antonio Castro, with 9%. Oceanwood will continue as the fourth-largest shareholder, with almost 5%, although it will strengthen its weight after exercising the conversion rights of a convertible bond that it subscribed to five years ago and which it will execute soon. The fund first invested in NH in 2013 by purchasing stakes owned by the savings banks and has grown its share over the last few years.

In this way, as a consequence of the conversion of all of NH’s convertible bonds, Oceanwood will hold 9.5% of the share capital post-conversion, assuming that all of NH’s convertible bonds currently in circulation are converted.

The exit of the Chinese

This shareholder move comes in the middle of the divestment process being undertaken by HNA, which in January announced that it had engaged JPMorgan and Benedetto, Gartland and Company to “review” its shareholder position in NH and to identify potential buyers.

That decision by the Chinese group came after Barceló’s failed proposal to merge its businesses with those of its rival NH. The offer, which was overwhelmingly rejected by NH’s Board of Directors, stirred up rumours of a takeover once again. Last week, the Chinese group revealed that, after receiving interest from various investors, it plans to put its 29.5% stake up for sale.

NH, with 380 hotels and around 59,000 rooms, closed the first quarter of 2018 with a net profit of €21.7 million, compared with losses of €24.8 million during the same period in 2017.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Chinese Conglomerate HNA Wants to Sell its Stake in NH Hotels

19 January 2018 – El Mundo

The largest shareholder of NH Hotels, the Chinese conglomerate HNA, is considering the possibility of divesting its stake in the Spanish hotel group. It has engaged the entities JPMorgan and Benedetto Gartland to identify possible buyers for its 29.3% participation in the Spanish hotel chain.

The Chinese investor group has submitted this information to the National Securities and Markets Commission (CNMV), explaining that it has engaged the aforementioned entities “to review its shareholding position in the NH Hotel Group”, which it holds through its company Tangla Spain, “which includes the identification of possible buyers for its stake”.

It was only a week ago that the Board of NH unanimously rejected the merger proposed by the Barceló group. This possible sale could be driven by the need for liquidity but the rejection decision may have precipitated the move by the Chinese firm.

The Chinese investor group had entered NH in 2013 with an initial participation of 20% through the subscription of a capital increase amounting to €234.28 million, which it increased to 29.5% in November 2015, after purchasing the 8.33% stake that the entity Intesa Sanpaolo held in the listed hotel chain.

Nevertheless, the disagreements arose shortly after its entry into the Spanish group’s share capital. The purchase of Carlson Rezidor, a rival of the Spanish hotel group in certain markets, resulted in the exclusion of the Chinese company from NH’s Board due to a conflict of interest. The letters confirming these disagreements were made public and the parties even came to a head in the courts.

HNA needs to obtain liquidity to pay off a debt that it took out in 2015, after carrying out several acquisitions worth USD 40 billion (€32.65 billion). And in December, it announced its intention to sell assets worth US 6 billion (€4.897 billion).

By the middle of November, the Asian conglomerate had sold 1.14% of its share capital in the Spanish hotel group, which meant divesting 4 million shares, whereby obtaining some liquidity.

Based on the current composition of NH’s shareholders, HNA is followed by the investment fund Oceanwood, with 12%, and the Hesperia Investor Group, with 9%.

Original story: El Mundo (by Silvia Fernández)

Translation: Carmel Drake

NH Rejects Barceló’s Offer But is Willing to Consider Other Proposals

11 January 2018 – Expansión

Yesterday, the Board of Directors of the NH Hotel Group revealed its position regarding the proposal made by Barceló to merge the two businesses. And, although it expressed its “unanimous” rejection of the offer, it did say it was willing to consider future “strategic opportunities” within the framework of “the consolidation trends that are prevailing in the sector”.

“The Board has carefully considered the fact that the proposed structure – a merger – would not allow for the creation of value for our shareholders over and above that already forecast for NH operating independently”. In its analysis, the Board does not consider appropriate “either the intrinsic value assigned to NH by the Barceló Group’s offer, or its scope or the exchange ratio offered”, according to the explanation presented to the CNMV.

The Co-President of Barceló, Simón Pedro Barceló, sent a letter addressed to NH’s Board of Directors in November, proposing the integration of the two groups to create a “national champion” with more than 600 hotels and 110,000 rooms around the world, as Expansión revealed on 20 November.

The Mallorcan group proposed taking control of 60% of the resultant (merged) company and for the remaining 40% to end up in the hands of the shareholders of the NH Hotel Group. It also set the price of the latter at €7.08 per share, which meant valuing the company at €2.48 billion.

Exchange ratio

For NH’s most senior governing body, which met yesterday for the second time to analyse the proposal made by its competitor, the exchange ratio proposed by Barceló does not reflect the relative valuation of the two companies, nor does it incorporate a control premium over NH’s share value or take into account the potential appreciation in the firm’s share price operating independently. Moreover, NH’s directors emphasised that the offer does not open a window of liquidity for its shareholders. The offer – which is non-binding and conditional upon a due diligence (detailed analysis) – proposes an integration with NH Hotel in exchange for shares issued by the latter, with the resultant company being listed. This operation, therefore, would effectively allow Barceló – which is owned by the third generation of the family of the same name – to debut on the stock market.

“The Board has valued very negatively the fact that the offer from Grupo Barceló lacks liquidity for NH’s shareholders”, reiterated the Board of the listed company.

NH’s Board of Directors includes Alfredo Fernández Agras, representative of Oceanwood (with 12% of NH’s share capital); José Antonio Castro and Jordi Ferrer Graupera, both representatives of Hesperia, with a 9.1% stake; and Ramón Aragonés, CEO of NH. By contrast, HNA does not have a presence on the Board, despite being the majority shareholder, with a 29.5% stake. The Chinese giant was expelled (from the Board) in June 2016 due to a conflict of interest after it signed a purchase agreement with Carlson Rezidor, which competes with the Spanish firm in certain European countries.

Sources at Barceló expressed their respect regarding NH’s decision, although they acknowledged that the position adopted by their rival left them with “a bitter taste since they had not been able to convince the Board of the good intentions behind the operation”. And they added: “We think that the offer was good for the Spanish hotel industry, the shareholders of NH and Barceló and the economy of the country as a whole, which would have benefitted from having a national champion to go out and compete seriously overseas”.

In response to NH’s rejection, Barceló “said the discussion was over”. According to sources at the company, “no other proposals are possible”.

The decision of NH’s Board of Directors was made public at the end of trading. NH’s shares finished trading yesterday at a price of €6.115 per share, after rising by 1.83%. Since Barceló expressed its interest in NH, the share price of the latter has increased by 22% (…).

NH closed 2016 with sales of €1.475 billion, an EBITDA of €181 million and a net profit of €30.8 million. The group’s strategic plan for the next three years forecasts a recurring profit of €100 million and an EBITDA of up to €290 million in 2019.

Meanwhile, Barceló closed 2016 with turnover of €2.855 billion, net sales of €1.98 billion, an EBITDA of €339 million and a net profit of €125 million.

At the operating level, NH has 380 hotels and 59,000 rooms in more than thirty countries, whilst Barceló owns more than 230 hotels in 22 countries and almost 52,000 rooms.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Oceanwood Boosts Its Participation in NH Hotels, Reaching 14.3%

 

18 August 2017

The British fund Oceanwood has raised its stake in the NH Hotel Group to 14.3% from 14.1%. Oceanwood has 50.11 million shares of Spanish hotel chain and has consolidated its position as its second largest shareholder, behind the Chinese group HNA, which controls 29.5% of the capital, and ahead of Hesperia, which has 9%. According to information sent to the Spanish National Securities Market Commission (CNMV), of the declared voting rights, 10,012 million (2.86%) correspond to borrowed shares, Europa Press reported.

Original Story: Expansion ProOrbyt

Translation: Richard Turner

Radisson Wants To Grow In Madrid & Barcelona

30 March 2017 – Expansión

Radisson Blu – the hotel chain belonging to the Carlson Rezidor group, which is itself controlled by the Chinese giant HNA – arrived in Spain in 2009, with the opening of the Radisson Blue Hotel Madrid Prado. Three years later, it opened a resort in Gran Canaria, and just a few months ago it inaugurated its newest hotel in the country, the Radisson Blu Resort & Spa, also in Gran Canaria.

Radisson Blu owns almost 300 hotels in 69 countries. Now, the company wants to strengthen its commitment to Spain and to this end, it is analysing Madrid and Barcelona with particular interest, as key destinations for the opening of new establishments under the Blu and Red brands. “Spain represents an opportunity. We perform most of our expansion through management contracts or franchises, which means that we are not interested in leases, however the properties must always be in good locations”, explained Richard Moore, Vice President for Western Europe, the UK and Ireland at Radisson Blu.

HNA Tourism Group completed the purchase of Carlson Hotels last year and so took over control of 51.3% of the Carlson Rezidor Hotel Group, which operates in Europe, the Middle East and Asia, where it competes with NH, in which HNA also holds a stake. (…).

Moore added that the chain has studied options on the Mediterranean coast but that, for the firm to open a hotel, it “has to fit with our brand. We are proud of the way we make our brands fit with the properties and of our relationships with the property owners”.

Specifically, in the case of its most recent hotel in the Canary Islands, the chain has reached an agreement with the Norwegian family group Wenaasgruppen, which owns 24 hotels. It is the second time that the company has worked with the Norwegian group, which also owns the other hotel that Radisson manages in Gran Canaria. (…).

Moore added “There are lots of reasons why we want to have a presence in Spain and, above all, in Gran Canaria”. He said that, in the last twelve months, the number of tourist arrivals in Gran Canaria has grown by 14% and the average revenue per room (RevPar) has risen by 18% – or 15% in the case of luxury hotels -. “25 airlines fly to 142 destinations from Gran Canaria in 25 countries. It is the second most popular destination after Tenerife”, he said.

Brexit

In terms of risks to the business, Moore does not think that Brexit will have a significant impact on tourism in the islands and less so on the hotels that the group manages, which are upscale establishments (five stars) with a very diversified client base. (…).

Original story: Expansión (by Rebecca Arroyo)

Translation: Carmel Drake

Starwood, Owner Of Spain’s Top Hotels, Is Up For Sale

2 November 2015 – Expansión

Whatever is decided in Stamford (USA), where Starwood Hotels & Resorts has its headquarters, will have a knock-on effect on some of Spain’s top hotels. The world’s eighth largest hotel group is up for sale and whoever acquires it will enter the Spanish market in style.

Starwood Hotels & Resorts is not the largest hotel chain in Spain. Its 17 properties are a far cry from the 164 owned by Meliá, the 141 owned by NH and the 93 owned by Accord, the overseas company with the most hotels in the country. Nevertheless, Starwood’s portfolio is special because it contains historical hotels such as the Palace in Madrid, the María Cristina in San Sebastián and the Alfonso XIII in Sevilla (pictured above), as well as individual assets such as the W Barcelona, also known as Hotel Vela, and 43 rooms at the complex designed by the architect Frank Gehry in the Marqués de Riscal winery.

None of the properties are actually owned by Starwood and therein lies much of their value: since the group does not own any of these real estate assets, it does not run any of their significant risks. “Starwood has a very valuable hotel portfolio in a complicated market for international brands that work with management contracts; until now, this has made it more difficult for these brands to enter Spain, where the owners of properties prefer a rental contract”, says Miguel Vázquez, Managing Partner of Irea Hotels.

Starwood only operates three of its 17 hotels in Spain under a lease contract – W Barcelona, María Cristina y Alfonso XIII -. The rest are management and franchise contracts. This is the model used by other foreign hotel giants, such as Hyatt, one Starwood’s potential suitors. The US firm was left without any presence in Spain when the Queiroz Pereira family decided to take over the management of the Hotel Villa Magna after it was re-opened in 2009. Since then, and especially following the announcement that the Four Seasons and Mandarin will soon be operating in the Canalejas complex and at the Ritz in Madrid, Hyatt, Hilton and Marriott have shown a great deal of interest in Spain.

Several Asian candidates are also in the running to take over Starwood. They include the sovereign fund China Investment Corporation, the local chain Jin Jiang and the airline Hainan, owned by HNA.

Two of the three already have links with Spain. Jin Jiang is one of Melía’s partners in China and, after purchasing Louvre Hotels in 2014, it has a dozen lower-cost establishments in Spain. HNA’s links are even greater still: it is the largest shareholder of NH – with a 29.5% stake -, it renders support services to 11 airports after it acquired Swissport and it is negotiating the purchase of a stake in the tourism group Globalia.

Luxurious – all but one of Starwood’s hotels are five-star establishments –, well-located and well-maintained. The group invested €20 million in Hotel Alfonso XIII, which is owned by the Sevilla Town Hall, between 2011 and 2012; it spent the same on the refurbishment of María Cristina. Others, such as the Marqués de Riscal Hotel and the Hotel Vela, are not even ten years old yet.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake

Santander & Costain End Their RE Partnership In Sotogrande

2 July 2015 – Expansión

The Spanish bank and the British company are sharing out Alcaidesa’s assets – the development is worth around €90 million.

According to the agreement reached between the two partners, Santander will retain the majority of the land owned by Alcaidesa Holding for residential development, whilst Costain will keep two small plots of land and the operational management of golf courses and the marina, which are already in operation.

To complete the transaction, Costain will pay Santander €37.3 million for its 50% stake in Alcaidesa and will take on €8.5 million of the debt that the property developer owes to the bank. The bank, through its subsidiary Altamira, will hold onto the majority of the property developer’s land, worth €45.8 million.

Santander inherited its stake in Alcaidesa from Banesto, which in turn formed an alliance with Costain in the 1990s, to undertake this residential and leisure project in the Cadiz town of La Línea, near Sotogrande. The crisis that began in 2008 caused a slow down in the construction of more homes in Alcaidesa, which left several unbuilt plots of land that will now pass into Santander’s hands.

The parties expect to complete the transaction in September, once all of the administrative and tax formalities have been completed.

At the end of 2014, the funds Cerberus and Orion Capital paid NH Hotels Group €225 million for the assets (for development), golf course and hotels in Sotogrande.

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake