Thailand group targets Europe with NH Hotels takeover

Minor International’s share price surged on Wednesday after the Thailand hotel, food and beverage company said it was planning to use debt to finance its €2.5bn takeover bid for Spain’s NH Hotels.

The proposed purchase would be Thailand’s largest overseas hospitality deal and would give Minor hotels scale and presence in “hard to get” cities across Spain, Benelux, central Europe and Italy, the company said.

“It’s a launching pad for the rest of the group, in terms of our food and beverage, and hotel brands and growing our business,” Minor chief operating officer Dillip Rajakarier said.

Owned by US-born billionaire William Heinecke, Minor operates 158 hotels in Asia, the Middle East, Australia and Africa. The NH acquisition would increase its portfolio to 540 hotels, Rajakarier said.

He said the firm — which operates hotels in 32 countries and food and beverage brands such as the Benihana sushi and steakhouse chain — was still looking for acquisitions worth up to $300m in locations such as London, Prague and Rome.

Minor’s shares closed 5.93% higher against a broader market gain of 0.35%, valuing the company at about $5.2bn.

Investors were relieved that the company was not eyeing an equity issue to finance the deal, traders said.

Minor said it would pay China’s HNA, NH’s biggest shareholder, €622m for a 26.5% stake. The conversion of some bonds to shares will take Minor’s stake over the 30% ownership threshold beyond which Spanish law requires a full takeover.

NH’s shares fell 3% on the news of Minor’s offer of €6.40 per share, below an earlier offer from Spanish Grupo Barcelo that valued shares at €7.08.

NH rejected Barcelo’s offer in January because it was an asset exchange and not cash.

A counter bid from Barcelo looked “tougher” because Minor would control 38% of NH, Kepler Cheuvreux said in a note.

Minor is targeting 51% to 55% ownership of NH and wants the Spanish firm to remain publicly listed and liquid, Rajakarier said.

“Our intention is not to issue new capital,” he said, adding if Minor went beyond 55% “we will find new investors”.

Minor began an investment drive in 2016 when it acquired Portuguese hotel brand Tivoli for €294m.