Regional consolidation continues. The latest news comes out of Malta, where International Hotel Investments (IHI), the investment arm of the Corinthia Group, has signed a conditional agreement to acquire the assets and operations of Island Hotels Group, which operates two Radisson Blu hotels in Malta, along with a catering business.
The purported deal could be worth around €106.5 million and a net equity value of the Island Hotels Group of €50 million.
Island Hotel Group currently has within its portfolio the The Radisson Blu Resort & Spa, Golden Sands and The Radisson Blu Resort, St Julian’s, both in Malta.
In a statement, IHGH said it believed that "an acquisition of its assets, management expertise and businesses by IHI represented an opportunity for IHGH shareholders to crystalize their investment at a fair price while continuing to form part of the future success of IHI."
For its part, IHI said it believed the acquisition would contribute significant synergies, gains and benefits, including operational synergies across the board and additional development opportunities that would arise as a result of folding in IHGH’s hotel operations with that of IHI’s own neighbouring hotels.
Both companies are also reportedly actively involved in the catering sector, in Malta and overseas.
In a joint statement, the two companies said that based on the completion of a satisfactory due diligence, and the indicative value confirmed, IHI would proceed with a voluntary offer for all the shares of IHGH in which the price for IHGH shares would be paid as to €1 in cash, split into two tranches, the first tranche of €0.55c payable on completion and the second tranche payable 12 months later. In addition to this cash component IHGH shareholders will also receive 0.246 IHI shares for each IHG share held through the issue of 9 million shares by IHI.
As part of the conditional agreement, management of IHGH would remain unchanged and would continue to operate all IHGH businesses as normal.
The agreement also anticipated that the current jobs within the respective companies would be safeguarded.
Scott Berman, U.S. hospitality & leisure practice leader at PwC, told Hotel Management recently that he expected more regional consolidation and pointed to such deals as Marriott International's acquisition of Africa's Protea Hospitality Group.
International Hotel Investments was set up and promoted by the Corinthia Group, a long-standing investor, developer and operator of upscale hotels in Europe, Africa and the Mediterranean region. Following an IPO in April 2000, the company's shares were listed on the Malta Stock Exchange.