The Board of Rezidor recommends the shareholders not to accept HNA Tourism Group's mandatory offer of SEK 34.86 per share
(Thomson Reuters ONE) -
This press release has been published in English and Swedish. In the event of
any discrepancy in content between the two language versions, the English
version shall prevail.
February 20, 2017 7:30am CET
The Board of Rezidor recommends the shareholders not to accept HNA Tourism
Group's mandatory offer of SEK 34.86 per share
* The Board of Rezidor[1] unanimously recommends the shareholders of Rezidor
not to accept the Offer but would like to emphasize the increased risks and
uncertainties for shareholders in connection with HNA Tourism Group's
acquisition of the majority of the shares in Rezidor, which shareholders
should consider before making a decision whether or not to accept the Offer
Background
This statement is made by the Board of Directors (the "Board") of Rezidor Hotel
Group AB (publ) ("Rezidor") pursuant to section II.19 of Nasdaq Stockholm's
Takeover Rules (the "Takeover Rules").
On April 27, 2016, HNA Tourism Group Co., Ltd. ("HNA Tourism Group") and Carlson
Hospitality Group, Inc. ("Carlson Hospitality Group") announced that they had
entered into an agreement regarding HNA Tourism Group's acquisition (the
"Acquisition") of Carlson Hotels, Inc. ("Carlson Hotels"). The Acquisition
included 87,552,187 shares in Rezidor owned by Carlson Hotels, corresponding to
51.3% of the outstanding shares and votes in Rezidor. The Acquisition was
completed on December 7, 2016, and triggered an obligation for HNA Tourism Group
to make a mandatory tender offer for the outstanding shares in Rezidor.
On December 22, 2016, HNA Tourism Group, through its wholly-owned subsidiary HNA
Sweden Hospitality Management AB ("HNA Sweden"), announced a mandatory cash
tender offer to the shareholders of Rezidor to acquire all outstanding shares in
Rezidor (the "Offer"). HNA Sweden offers SEK 34.86 in cash per share in Rezidor,
subject to adjustment should Rezidor pay any dividend or make any other value
transfer to shareholders prior to settlement of the Offer.[2] The offer price is
6.3% below the closing price of the Rezidor share on Nasdaq Stockholm of SEK
37.20 on December 22, 2016, being the last trading day prior to the announcement
of the Offer. The offered price corresponds to the volume-weighted average price
for the Rezidor share during 20 trading days preceding the date of announcement
of entering into the agreement regarding the Acquisition. According to HNA
Tourism Group's announcement of the Offer, the offer price is the minimum price
to be paid in the Offer in accordance with rulings received from the Swedish
Securities Council (see rulings AMN 2016:10 and AMN 2016:27).
Completion of the Offer is conditional upon the Offer, the settlement of the
Offer and the acquisition of Rezidor receiving all necessary regulatory,
governmental or similar clearances, approvals and decisions in each case, on
terms that are acceptable to HNA Sweden.
For more information about the Offer, see
http://www.hnagroup.com/en/discl/HNA_Website2017/legal.html.
The Board's recommendation
In accordance with the provisions of the Takeover Rules, the Board has evaluated
the Offer.
The Board has engaged SEB Corporate Finance as financial advisor and Gernandt &
Danielsson Advokatbyrå as legal advisor in relation to the Offer. The Board has
further appointed DNB Markets to provide a fairness opinion in relation to the
Offer.
The Board unanimously recommends the shareholders not to accept the Offer. The
Offer does not reflect the value of Rezidor from a financial perspective.
The recommendation is based on various assumptions and conclusions made by the
Board, including:
* Rezidor is in a turnaround process with several measures already taken in
order to increase profitability.
* Rezidor has successfully continued to pursue its asset management
strategy, reduced its lease exposure and exited several loss-making
hotels.
* A cost containment plan with reductions of central costs as well as
further increases of procurement efficiencies have been implemented with
further expected savings of EUR 10 million per year.
* Adoption of a new transfer pricing model and sustainable tax strategy to
reflect recent tax law changes initiated by OECD and EU (BEPS) which
will lead to a more normalized tax rate in the future.
* The Board believes that the above measures, together with a consistently
strong asset-light development pipeline of rooms, will contribute to
improved profitability in the coming years.
The position of the Board is supported by the fairness opinion provided by DNB
Markets. The opinion, which is set forth in the appendix to this press release,
concludes that the Offer is not fair from a financial point of view.
Additional considerations and risks for the shareholders to consider before
taking a decision whether or not to accept
Despite unanimously recommending the shareholders not to accept the Offer, the
Board is of the opinion that the uncertainties have increased following HNA
Tourism Group's acquisition of the majority of the shares in Rezidor, including:
* HNA Tourism Group does not state any future plans or strategies of the
ownership of Rezidor and hence, the Board is not able to fully analyse the
Offer's consequences for Rezidor and its other shareholders, particularly in
view of HNA Tourism Group's other interests in the hospitality industry.
* Rezidor's ownership structure is already concentrated and the liquidity of
the share is currently limited. As a result of the Offer, the liquidity of
the Rezidor share may be further reduced and the ownership structure may
become more concentrated, which the Board deems would be negative for
Rezidor's other shareholders.
* HNA Tourism Group has not made any public statements regarding the future
composition of the Board of Directors of Rezidor, including directors
independent of HNA Tourism Group. The composition of the Board of Directors
will impact the governance of Rezidor, in particular given the comprehensive
business arrangements between Rezidor and HNA Tourism Group via Carlson
Hotels.
The Board would also like to draw the shareholders' attention to the following
features of the Offer:
* While the acceptance period for the Offer commenced on February 3, 2017 and
is expected to end on March 10, 2017, the settlement of the Offer is not
expected to commence until April 7, 2017, subject to the conditions for the
Offer being fulfilled or waived.
* Accordingly and subject to the conditions for the Offer being fulfilled or
waived, settlement is currently expected to occur one month after the expiry
of the acceptance period. According to HNA Tourism Group's announcement of
the Offer, settlement could be delayed up to nine months.[3]
* HNA Tourism Group has not proposed any compensation (for example, interest)
to the shareholders of Rezidor for such delay.
As regards the regulatory approval process, including the approvals that
constitute a condition for the Offer, the Board notes the following statements
made by HNA Tourism Group and the Swedish Securities Council in connection with
the Swedish Securities Council ruling AMN 2016:27:[4]
Statement by HNA Tourism Group
"In order to finance the mandatory tender offer, which constitutes a foreign
transaction for HNA Tourism Group, and to transfer the funds out from China to
be used for the settlement of the Offer, approvals from the National Development
and Reform Commission of the People's Republic of China ("NDRC") and the
Ministry of Commerce of the People's Republic of China ("MOFCOM") are required.
In addition, the State Administration of Foreign Exchange ("SAFE") must register
the amount to be transferred.
HNA Tourism Group intends to apply for approvals both from NDRC and MOFCOM
before the completion of the Acquisition, that is, before the announcement of
the Offer. Final approvals from NDRC and MOFCOM as well as a preliminary
approval from SAFE are expected to be obtained before the completion of the
Acquisition, that is, before the announcement of the Offer and no later than
before the expiry of the acceptance period in the Offer. Final approval from
SAFE to transfer the funds out from China cannot be obtained until the final
settlement amount has been determined."
It is not clear from HNA Tourism Group's announcement of the Offer whether the
relevant approvals from NDRC and MOFCOM have been obtained, but since the Offer
is subject to regulatory approvals it is the Board's understanding that the
required approvals have not yet been obtained.
Under the Takeover Rules, the Board is required, based on the statements made by
HNA Tourism Group in connection with the Offer, to express its opinion on the
effects the implementation the Offer may have on Rezidor, specifically
employment, and its views on HNA Tourism Group's strategic plans for Rezidor and
the effect these may be expected to have on employment and the places where
Rezidor conducts its business. To that end, HNA Tourism Group has made the
following statement in connection with the announcement of the Offer:
"HNA Tourism Group views significant value on the competence of Rezidor's
management and its employees. There are currently no decisions on any material
changes to Rezidor's management or employees, including the terms of employment
and locations of business."
The Board cannot evaluate this but must assume that it is correct.
____________
This statement shall in all respects be governed by and construed in accordance
with Swedish substantive law. Disputes arising from this statement shall be
settled exclusively by Swedish courts.
***
Stockholm, February 20, 2017
Rezidor Hotel Group AB (publ)
The Board of Directors
For further information, please contact:
Staffan Bohman, acting chairman in relation to the Offer, through Jenny Winkler,
Secretary of the Board, at tel: +32 2 702 9308.
This information is information that Rezidor Hotel Group AB (publ) is obliged to
make public pursuant to the Takeover Rules. The information was submitted for
publication, through the agency of the contact person set out above, on February
20, 2017 at 7:30am CET.
--------------------------------------------------------------------------------
[1] Trudy Rautio, Wendy Nelson and David Berg have not, due to conflict of
interest following the sale of Carlson Hotels to HNA Tourism Group, participated
in the Board's processing of, or any other resolutions concerning, the Offer.
According to a press release dated January 27, 2017, David Berg has with
immediate effect resigned from his position as member of the Board. The
remaining members of the Board, being Staffan Bohman, Anders Moberg, Charlotte
Strömberg and Göran Larsson, have for the purposes of the offer appointed
Staffan Bohman as chairman.
[2] The Board has proposed a dividend of EUR 0.05 per share to be paid for the
year ending December 31, 2016.
[3] The Board notes the following statements made by HNA Tourism Group in
connection with the announcement of the Offer: "If final regulatory approvals
for the transfer of funds out from China to be used for settlement are not
obtained before April 7, 2017, the settlement may be postponed until such final
regulatory approvals have been obtained, in total up to nine months from the
initiation of the acceptance period. Once the condition for the Offer is
fulfilled or waived, HNA Sweden will be obligated to complete the Offer
irrespective of whether the settlement is postponed."
[4] These statements constitute English translations made by Rezidor and have,
where relevant, been adjusted to match the defined terms used herein.
Press release (PDF):
http://hugin.info/142138/R/2079897/783153.pdf
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Rezidor Hotel Group via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 20.02.2017 - 07:30 Uhr
Sprache: Deutsch
News-ID 525126
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