Carlson CEO to now lead Rezidor as Wolfgang M. Neumann resigns


When HNA Group acquired Carlson Hotels it opened up a whole new can of worms—and the lid is still off. 

Today it was announced that, as part of a new structure between Carlson and Rezidor, Federico González Tejera, who was named CEO of Carlson in January, has now resigned that post and will become president and CEO of Rezidor. Meanwhile, current Rezidor CEO Wolfgang M. Neumann will resign and serve as a non‐executive director on the Rezidor Board of Directors. John Kidd, the current president of HNA Group, will become CEO of Carlson Hotels.

HNA acquired Carlson in April 2016 and by doing so also acquired Carlson's 51.3-percent stake in Rezidor. Rezidor is Carlson’s master licensee, with hotels in Europe, the Middle East and Africa.

As the agreement noted, since the closing of the transaction would result in an indirect change of control in Rezidor, HNA must, under Swedish takeover rules, launch a mandatory public tender offer for the remaining 48.7 percent of Rezidor.

As we wrote about last May, these rules and processes are abstruse in the U.S., but as Daniel Marre, a partner at Chicago-based law firm Perkins Coie explained, they are fairly standard for acquisitions in Europe. 

“It’s a shareholder protection mechanism,” Marre said. In short, if a company, in this case Rezidor, changes ownership, shareholders have an option to leave. “You can sell your shares if you don’t want to be with the new owners,” Marre continued. 

According to Swedish law, a mandatory offer must be made when an entity "acquires shares carrying 30 percent or more of the voting rights in the target company." Minority shareholders can be forced out, however, when the bidder owns more than 90 percent of the shares in the target.

While Rezidor’s corporate office is in Brussels, the company itself is listed in Stockholm, and, therefore, is required to follow Swedish rules. “It’s like a Delaware corporation having its headquarters in Chicago,” Marre said. “They may all be sitting in Illinois, but when it comes to corporate governance, they have to follow Delaware law.”

HNA, Marre said, must now make a decision. Once it buys Carlson—which comes with that 51.3-percent stake in Rezidor—they either must sell 20-odd percent of their stake down to below 30 percent on their own within a month of the closing, or offer to buy the shares of anyone who owns Rezidor stock and does not want to be affiliated with HNA. In short, they must either drastically reduce or increase their Rezidor stake. 

What Now?

Rezidor held its annual general meeting on April 28, and today there is fallout from it. Rezidor and Carlson Hotels have announced that they will create a Global Steering Committee to provide overall strategic direction to both companies. The Committee will be comprised of an equal number of representatives from Carlson Hotels and Rezidor, and will provide guidance and strategic counsel to the respective management teams of Carlson Hotels and Rezidor. Both Carlson Hotels and Rezidor will continue to operate as independent entities and the companies will continue to be governed and led by each company's respective Boards of Directors and key executives. The creation of a new Global Steering Committee has been approved by the Boards of Directors of both companies.

Charles Mobus, director of the Rezidor Board and director of the Carlson Hotels Board, said, "Rezidor and Carlson Hotels share a rich history, and their partnership remains an important component to both companies' global success. Over the past few months, Rezidor and Carlson Hotels have carefully studied the ways in which the companies' relationship can be enhanced in order to maximize value and growth potential. As a result, the Boards of Directors of both companies have determined that this new strategic approach will enable both Rezidor and Carlson Hotels to deliver improved results by better capitalizing on their existing relationship and maximizing the potential of their combined international footprint."

"Rezidor's relationship with Carlson Hotels creates numerous opportunities for growth and success," González said. "The establishment of a Global Steering Committee will ensure that both businesses are in lock‐step and are able to make more informed decisions that will benefit each entity and the Carlson‐Rezidor family as a whole. As CEO of Rezidor, and in close collaboration with the Steering Committee, I believe that we can realize tremendous value for Rezidor's shareholders and both companies' customers and employees."