Jin Jiang’s Radisson bid highlights capital differences
 
Jin Jiang’s Radisson bid highlights capital differences
12 DECEMBER 2018 9:39 AM

If Shanghai-based Jin Jiang’s bid to acquire all of Radisson Hotel Group is successful, Radisson will have gone in the space of a few months from being owned by private aviation company HNA Group to full ownership by a state-owned enterprise.

GLOBAL REPORT—Shanghai-based Jin Jiang International Hotels wants complete ownership of Brussels-based Radisson Hotel Group, according to sources.

On 11 December, Jin Jiang made a 40 Swedish krona ($4.38) per-share offer for the remaining 49.79% of Radisson it does not currently own, a deal that values Radisson at 7 billion krona ($766.8 million).

In August, Jin Jiang bought the other 50.21% for 35 krona ($3.83) per share from fellow Chinese company HNA Group.

Jin Jiang is listed on the Hong Kong Stock Exchange, while Radisson is listed on the Stockholm Stock Exchange.

Knut Kleiven, Radisson Hospitality’s deputy president and CFO, said he was unaware of the offer until it was announced.

“Of course, we knew that Jin Jiang had until the deadline of (11 December) to make an offer, or to sell down their ownership as per (Stockholm) stock exchange rules. (The stock exchange) is very clear on that,” Kleiven said. “And so then they came in with this offer, and at the same time it was also announced the timing of the acceptance period. It is now the job of our independent committee of the board of directors to recommend a course of action to shareholders.”

Jileen Loo, senior director at business advisory CBRE Hotels, said Jin Jiang’s capital is completely different to that of HNA’s.

“It is a state-owned enterprise, based in Shanghai, while HNA is a private company with its core interest in aviation,” she said.

Loo added Jin Jiang’s full ownership of Radisson would be an obvious extension of their existing brands and would create further competition in markets such as Europe.

“Jin Jiang is a major player, one that always has had significant presence,” she said.

According to Louvre Hotels Group’s website, Jin Jiang owns or manages more than 7,700 hotels with more than 800,000 guest rooms in 67 countries.

Jin Jiang had not replied to interview requests at time of publication.

Background on the players
Kleiven said in April 2017, when the hotel company was known as Carlson Rezidor Hotel Group, the board of directors recommended shareholders not accept a similar mandatory tender offer from HNA, which offered 34.86 krona ($3.82) per share for the 49.7% of Rezidor shares it did not own.

HNA ownership did not sit well with some shareholders, as was the case at NH Hotel Group, which subsequently was sold by HNA to Thailand’s Minor International.

On 20 February 2017, the board of Radisson—then Carlson Rezidor—recommended shareholders reject the full HNA bid, and in August of that year HNA ended its tender process.

Jin Jiang already owns in full Radisson Hospitality, Inc., the Minneapolis-based vehicle that formerly was Carlson Hotels. That section, together with the European part, has approximately 1,400 hotels.

Jin Jiang hotel brands and assets include J.Hotel, Jin Jiang, Metropolo, Jin Jiang Inn, Louvre Hotels Group, Plateno Group and Vienna Hotel Group. Radisson—the parent company accurately is named Radisson Hospitality AB—contains, among others, Radisson, Radisson Blu, Radisson Red, Park Inn by Radisson and Park Plaza.

A Radisson news release, which stated the company is evaluating the Jin Jiang offer, refers to a consortium of buyers led by Jin Jiang but also including “SINO-CEE Fund, through Aplite Holdings AB,” the same groups that purchased the August shares, an acquisition ratified at Radisson Hospitality’s general meeting held in Stockholm on 10 December.

That deal was finalized on 13 November. The acceptance period for the new offer will run between 7 January and 1 February, with Radisson due to comment on the deal no later than two weeks from the beginning of February.

In its third-quarter 2018 earnings report on 25 October, Radisson Hospitality’s year-over-year performance showed a 1.7% increase in revenue to €253.3 million ($287.6 million) and a 5.6% increase in revenue per available room. Earnings before interest, tax, depreciation and amortization rose 16.9% to €40.2 million ($45.6 million).

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