Hyatt Retreats From Offer to Buy Spain's NH Hotels

Chicago-based Hyatt Hotels Corp., which days ago made a play for Spanish hotel chain NH Hotels, apparently has had a change of heart. "Based on the information we now have, we believe that the path to a successful tender offer by Hyatt under the terms expressed in our letter has narrowed to a point of being impractical," said Mark Hoplamazian, president and chief executive officer of Hyatt, in a letter dated July 29 that was released to the Spanish stock exchange by Madrid-based NH. Initially, Hyatt had offered a 100 percent cash bid for NH.

According to Bloomberg News, just two hours after Hyatt made overtures to NH, Thailand-based Minor International, which already owns close to 30 percent of NH, disclosed it had increased its stake in NH to 44 percent, because it had agreements in place to buy Chinese conglomerate HNA's own 8.4 percent holding and Oceanwood Capital Management's 5.7 percent stake in the company. Minor had announced an intent to pursue these two deals, together valued at approximately US$1.92 billion, in early June.

Dillip Rajakarier, Minor International's chief operating officer, told Bloomberg News that Hyatt's interest in acquiring NH had come too late to stop its own offer from succeeding. "Hyatt has entered the church, and the bride has already left," he said.

In its July 29 letter to NH, Hyatt said it believes Minor's bid undervalues the company, and stated that if NH "wishes to open a dialogue with Hyatt to pursue other potential paths to unlock value for NH shareholders, we stand ready to do so."

Since opening its first hotel in 1978, NH Hotel Group's portfolio has grown to more than 370 hotels worldwide. Bangkok-based Minor, which was formed more than a decade ago, is one of Thailand's largest hospitality and leisure firms, with more than 160 hotels and resorts, 2,000 restaurants and 400 retail locations, according to the company's website.