After several months of negotiation, Marriott International is set to acquire the Barbados-headquartered luxurious Elegant Hotels Group in a US$200 million deal.
In a statement, the companies explained that the “offer price implies an enterprise value for Elegant of approximately US$199 million based on Elegant’s total net debt of US$68.9 million as at March 31, 2019”.
Under the terms of the all cash offer, each Elegant shareholder would be entitled to receive 110 pence per Elegant share.
The offer values the entire issued and to be issued ordinary share capital of Elegant at approximately US$130.1 million (£100.8 million), based on an exchange rate of £1 to US$1.29.
According to the statement, the offer price represents a premium of about 57.1 per cent to its Thursday close.
The Elegant Hotels Group is said to represent more than a quarter of the island’s quality leisure tourist room stock.
It was not immediately clear if the directors of the Elegant Group agreed to the acquisition due to operating and trading risks the group currently faces.
Chief Executive Officer of the Elegant Hotels Group Sunil Chatrani told Barbados TODAY he was not in a position to say much at this point, but said he was hoping it would close before year end.
“Based on takeover code, there is not a lot I can say outside of what has already been announced officially. I can confirm though, that we had an approach by Marriott. We have been in discussions with them for a number of months and we have put out the official statement this morning (Friday),” said Chatrani.
The award-winning Elegant Hotels, which also operates properties in St Lucia, went public in 2015 by listing on the London Stock Exchange.
Elegant Hotels owns and operates one restaurant, Daphne’s, and seven luxury hotels – Tamarind, Colony Club, Treasure Beach, The House, Crystal Cove, Turtle Beach and Waves Hotel and Spa.
In its financial year ending September 30, 2018, the group reported revenue of US$62.9 million, and EBITDA before non-recurring items of US$19.7 million.
Following the completion of the deal, it is Marriott’s intention to carry out renovations to the hotels in the Elegant portfolio and operate them as all-inclusive resorts.
President and Chief Executive Officer of Marriott Arne Sorenson said: “There is a strong and growing consumer demand for premium and luxury properties in the all-inclusive category.
“The addition of the Elegant Hotels portfolio will help us further jumpstart our expansion in the all-inclusive space, while providing more choices on the breathtaking island of Barbados for our 133 million Marriott Bonvoy members,” he said.
Also commenting on the deal, President of Caribbean and Latin America of Marriott International Tim Sheldon said he was excited.
“We are very excited about adding these outstanding Elegant Hotel properties to our Caribbean and Latin American portfolio. We have been incredibly impressed with the hotels and the staff and look forward to welcoming them and their guests to the Marriott family,” he said.
Non-Executive Chairman of Elegant Hotels Simon Sherwood said the board of Elegant Hotels was confident in the group’s long-term prospects “but believes that this offer represents compelling value for our shareholders and a great opportunity for our employees to be part of one of the world’s leading hotel companies.
“The fact that Elegant Hotels has attracted the interest of a company of Marriott’s calibre is a resounding endorsement of the outstanding quality of our properties, operations and people, and indeed of Barbados as a highly desirable destination. We are therefore unanimously recommending the offer to our shareholders,” said Sherwood.
According to Marriott officials, the Elegant portfolio of 588 rooms represents a set of prime real estate in an attractive, stable and popular Caribbean destination, adding that
Marriott currently has no beachfront properties in Barbados.
The acquisition is conditional on a number of factors including the approval of the scheme by the majority shareholder. [email protected]