Marriott has reached an agreement with the board of
Elegant Hotels Group on the terms of a
recommended all cash offer for the company.
Under the terms of the
offer, each Elegant shareholder would be entitled to receive 110
pence per Elegant share. The offer values the entire issued and to
be issued ordinary share capital of Elegant at approximately
£100.8 million ($130.1 million based on £1:$1.29).
price implies an enterprise value for Elegant of approximately
$199 million based on Elegant’s total net debt of $68.9 million
as at 31 March 2019 as set out in Elegant’s most recent half year
report for the six months ended 31 March 2019.
Elegant owns and
operates seven hotels with 588 rooms and a beachfront restaurant
on the island of Barbados. Six of the seven properties are
situated along the prestigious west coast of Barbados commonly
known as the “Platinum Coast.” The majority of Elegant properties
are operated as all-inclusive resorts.
“There is a strong and
growing consumer demand for premium and luxury properties in the
all-inclusive category,” said Arne Sorenson, President and Chief
Executive Officer, Marriott International. “The addition of the
Elegant portfolio will help us further jumpstart our expansion in
the all-inclusive space, while providing more choices on the
breathtaking island of Barbados for our 133 million Marriott Bonvoy members.”
Following the acquisition, Marriott intends to
carry out renovations to the hotels in the Elegant portfolio and operate
them all as all-inclusive resorts under one or more of Marriott’s
Marriott also intends to market the
hotels for sale subject to long-term management agreements under
which Marriott would continue to manage the properties.
Non-Executive Chairman of Elegant, said, “The Board of Elegant
Hotels is confident in the group’s long-term prospects but
believes that this offer represents compelling value for our
shareholders and a great opportunity for our employees to be part
of one of the world’s leading hotel companies. The fact that
Elegant Hotels has attracted the interest of a company of
Marriott’s caliber is a resounding endorsement of the outstanding
quality of our properties, operations and people, and indeed of
Barbados as a highly desirable destination. We are therefore
unanimously recommending the offer to shareholders.”
Completion of the
transaction is subject to satisfaction or waiver of the offer
conditions set out in the offer announcement, including approval
by Elegant shareholders.