Chicago-based Hyatt Hotels Corp., the lodging company founded by the billionaire Pritzker family, has sent a letter to the Spanish hotel chain NH Hotel Group indicating its interest in acquiring the Madrid-based hotel company.
"Hyatt has a demonstrated track record of making strategic investments to extend the reach of our brands and create value for our stakeholders," Mark Hoplamazian, Hyatt's president and chief executive officer, said in an email statement Thursday, July 26, to Bloomberg news. "In keeping with our growth strategy, we submitted a letter of intent expressing our interest in pursuing a potential acquisition of NH Hotel Group."
NH Hotel Group shares climbed as much as 5.7 percent on the news, the biggest uptick since November 2017, leading to an increase in the company's market value of more than approximately US$3 billion. NH has a portfolio of over 370 hotels worldwide.
This is not the first time overtures have been made to NH. In November 2017, Spanish hotel operator Barceló Hotel Group made a tentative offer to buy NH in a multibillion-dollar merger that would create the country's largest hotel group. A combined NH-Barcelo company at that time would have comprised over 600 hotels and annual sales of more than US$4 billion.
NH Hotels' future has been uncertain since representatives of its biggest shareholder, the Chinese conglomerate HNA Group, were ejected from its board last year over accusations of a conflict of interest due to HNA's takeover of a rival hotel group Carlson-Rezidor, which earlier this year was rebranded as Radisson Hotel Group.
Any potential offer from Chicago-based Hyatt would provide an alternative for NH Hotel shareholders, who currently are weighing a tender offer from Bangkok-based Minor International, one of Thailand's largest hospitality and leisure firms, with more than 160 hotels and resorts in 20 countries, 2,000 restaurants and 400 retail locations, according to the company's website. That deal is conditional on approval from shareholders at an annual general meeting scheduled for next month. Minor already is NH's biggest shareholder and said in a regulatory filing earlier this week that it had raised its stake to 35.55 percent. It acquired HNA Group Co.'s stake in June, amid far-reaching asset sales by the debt-ridden Chinese conglomerate.
Minor's offer for the portion of NH Hotels it didn't own was valued at about US$2 billion in June of this year, when the plans were first announced.
Founded by Jay Pritzker in 1957 with the purchase of Hyatt House, a small motel near Los Angeles International Airport, Hyatt has grown into a global company with 14 brands, including Grand Hyatt, Hyatt Regency, Park Hyatt, Andaz and Hyatt Place. The company currently has a portfolio of more than 700 properties in more than 50 countries and a significant development pipeline.
"We believe that marrying NH Hotel Group's strong footprint in Europe and select other markets with Hyatt's global presence would yield a powerful portfolio of brands and network of hotels delivering compelling benefits for guests, owners and shareholders of both companies," Hoplamazian said in a statement. Hyatt, he added, seeks to "conduct additional due diligence to further inform valuation and determine the optimal approach to a potential offer."