Several of you may have seen the article in the Times today that speculates on a bid approach for Elegant Hotels pitched at around 110p from Melia Hotels, an international Spanish hotelier. Currently the share price is 83.5p. The implied net asset value at the interim results in June was 175p and the current tangible book value is somewhere in excess of 100p. Although NAV depends very much on the sterling dollar exchange rate and which brokers figures you look at.
The company floated in May 2015, in which time the share price has only briefly exceeded the float price of 100p, but has paid out handsome dividends
Given the low valuation a bid approach would not be a surprise and is one of several reasons why I hold the shares. Luke Johnson who is a non executive director holds 12% of the company. Should a bid materialise I am not sure that 110p will be sufficient and I cannot see Luke Johnson supporting a bid that does not recognise the value of the company. Off course this may all turn out to be a storm in a tea cup, but I would suggest that there is no smoke without the proverbial fire.
Thoughts and comments welcome.
All the best
Jonno
Looks like it came and went (for now). RNS this morning.
Gus
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4 December 2017
Elegant Hotels Group plc ("Elegant Hotels" or the "Company")
Confirmation of approach for Elegant Hotels Group plc and Termination of Talks
The Board of Elegant Hotels notes the recent press speculation concerning the possibility of an offer being made for Elegant Hotels.
The Board of Elegant Hotels announces that it had received an approach from Melia Hotels International SA "Melia Hotels" relating to a possible all cash offer for all of the issued and to be issued share capital of the Company which may be made by Melia Hotels or one of its investment affiliates. The Company further announces that discussions with Melia Hotels have now been terminated, and that Melia Hotels does not intend to make an offer to acquire the entire issued and to be issued ordinary share capital of Elegant Hotels.
