(Editor's note: This article was updated on June 4 with Dalata Hotel Group's response to the acquisition offer.)
Ireland-based Dalata Hotel Group has rejected an all-cash offer from Pandox AB and Eiendomsspar AS to acquire Dalata for €1.27 billion ($1.48 billion).
On Tuesday, Stockholm-based hotel owner and operator Pandox and Oslo-based Eiendomsspar made a non-binding proposal of €6.05 per share, a 5% premium on the current value of Dalata shares. Eiendomsspar already owns 8.8% of Dalata and 24.8% of Pandox.
The two partners said the deal would “likely to solely be in cash,” and if it was finalized, Eiendomsspar’s current shareholding in Dalata would be transferred to a new company that Pandox and Eiendomsspar would set up to facilitate the acquisition.
In a separate statement, Dalata said the acquisition from Pandox and Eiendomsspar “materially undervalues [Dalata] and its prospects and has therefore unanimously rejected the ‘Pandox possible offer.’”
Dalata's board said 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 nonbinding proposals to acquire the entire issued and to be issued share capital of [Dalata].”
It added Pandox is “not a participant in the FSP, having declined to enter the process on the terms of the process.”
Under Irish law, the two Scandinavian partners have until July 15 to make a formal offer, but Pandox stressed in its initial offer that it does not comprise a “firm intention to make an offer under rule 2.7 of the Irish takeover rules.”
Earlier this year, Dalata announced it was undergoing a strategic review and indicated it was open to acquisition offers. Dalata executives said that in their opinion the company’s share value did not adequately represent its perceived worth and growth ambitions. No guide price was announced at that time.
Dalata’s share price has risen steadily in the last 12 months, notably since it announced its strategic review. Year over year, its share price has risen more than 40%, while since the strategic review was announced on March 6 it has risen by more than 25%.
On Tuesday, the day Pandox-Eiendomsspar announced its proposal, Dalata's share price closed at €6.09, only marginally higher than the price per share in the acquisition offer.
Dalata has made several hotel acquisitions in recent months, including the 229-room Radisson Blu Hotel, Dublin Airport, for €83 million, which will be rebranded under Dalata’s Clayton brand.
Dalata has 61 hotels, with a mix of owned and leased properties under its Clayton and Maldron brands in Ireland and the U.K. It currently has almost 13,000 rooms and is seeking approximately 21,000 rooms by 2030, which will include a move into mainland Europe.
Dalata's full-year 2024 results saw revenue increase in year-on-year terms by 7.3% to €652.2 million, and earnings before interest, taxes, depreciation and amortization increase 5.1% to €234.5 million. As of press time, it has a current market capitalization of €1.25 billion.
Pandox has a portfolio of 163 hotels with approximately 36,000 rooms in 11 Northern European countries.
Eiendomsspar has ownership interests in multiple real estate classes, but within the hotel sector it has 11 hotels, all in Norway, and has approximately 36% of the voting shares of Pandox. Its hotels include the 274-room Grand Hotel Oslo by Scandic; 114-room Clarion Collection Hotel Gabelshus, and 112-room Hotel Christiania Teater, Ascend Hotel Collection, all three of which are in Oslo.