Dalata has rejected a possible offer from Pandox and Eiendomsspar to buy the Irish hotel group for €1.3 billion.
On Tuesday, the consortium floated buying Dalata for €6.05 a share, with the proposal representing a 5 per cent premium to Dalata’s closing price on Monday June 2 and a 27.1 per cent premium to Dalata’s stock in March before it launched a strategic review to explore options for enhancing shareholder value, including a potential sale.
While no formal offer has yet being made by the consortium, Dalata has rejected the possible offer, noting that it "materially undervalues the group and its prospects."
Dalata’s portfolio comprises 30 owned hotels which are valued at €1.7 billion including assets under construction as well as 22 leased hotels the majority of which are on long term institutional lease agreements with a weighted average lease length of 29 years and rent cover of 1.7x. The company also operates three managed hotels.
Eiendomsspar currently has an 8.8 per cent stake in Dalata, making it the second largest shareholder in the hotel group.
What they said
Dalata commented: "The board has unanimously rejected the offer and confirms it continues to engage in constructive discussions with a number of parties who are participating in the formal sales process and who have submitted initial non-binding proposals to acquire the entire issued and to be issued share capital of the group. Pandox is not a participant in the process, having declined to enter the process on the terms of the process set out in the group’s announcement dated 6 March."