Marriott International (NASDAQ: MAR) announced today the company has reached an agreement with the board of Elegant Hotels Group plc (LON: EHG; “Elegant”) on the terms of a recommended all cash offer for Elegant. 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).
The offer price implies an enterprise value for Elegant of approximately $199.0 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. Upon completion of the planned property renovations, Marriott intends to operate all the Elegant hotels as all-inclusive resorts under one or more of Marriott’s collection brands. In keeping with Marriott’s asset-light strategy, over time, Marriott also intends to market the Elegant hotels for sale subject to long-term management agreements under which Marriott would continue to manage the hotels.
In August, Marriott launched an all-inclusive platform with the goal of growing a worldwide portfolio of resorts in popular vacation segments by leveraging the company's operational and development expertise, its Marriott Bonvoy travel program with roughly 133 million members, and its iconic hotel brands.
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.