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Jin Jiang to buy Radisson Hospitality from HNA Group
by Jena Tesse Fox | Aug 10, 2018 3:00pm
That didn’t take long: Less than a week after rumors began circulating that Radisson Hotel Group might change hands from one Chinese conglomerate to another, a deal is in place. Hainan-based HNA Group has agreed to sell its holdings in Radisson Hospitality AB and Radisson Holdings to a consortium headed by Jin Jiang International Holdings, which is controlled by the Shanghai government.
The transaction could make Jin Jiang the world’s seventh-largest hotel operator with 344,000 rooms, STR estimates. Radisson Hotel Group's portfolio consists of more than 1,400 hotels operating or in development under its eight brands.
Under the terms of the deal, Jin Jiang agreed to buy 51.15 percent of Radisson Hospitality’s outstanding shares at 35 Swedish crowns ($3.87) per share, or a total of about 3 billion crowns ($332 million). Reuters estimated the offer price represents a 5-percent discount to the company’s stock price as of Thursday’s close. The consortium would then buy an additional 18.5-percent stake in Radisson Hospitality that HNA Sweden has pledged and transferred to a lender as security for a loan. After the share purchase, the consortium also would acquire 100 percent of Radisson Holdings for an undisclosed amount.
Last week, Bloomberg estimated HNA could earn at least $2 billion from the sale.
In total, HNA Group has sold more than $17 billion in assets this year to lower one of China’s biggest corporate debt piles.
HNA Offloads
The deal follows a recent trend of Chinese corporations offloading foreign assets in the wake of a national crackdown on international investments. In 2018 alone, HNA sold its shares of Hilton Worldwide Holdings and its spinoffs for a combined $8.5 billion, and began unloading its NH shares to Thailand’s Minor International.
HNA acquired Carlson Rezidor Hotel Group, now Radisson Hotel Group, two years ago in a move that some shareholders saw as a conflict of interest. At the time, HNA owned almost 30 percent of NH Hotels and Carlson Rezidor was viewed as a direct competitor. Subsequently, London hedge fund Oceanwood Capital Management, which owned a 10-percent stake in NH Hotel Group, called for the chairman of NH Hotel Group to temporarily stand down until the company resolved any conflict of interest related to HNA's buy of Carlson Rezidor.
Following the July death of HNA co-founder and co-chairman Wang Jian, HNA's future efforts to pay down its debts by selling assets seemed to be in doubt. Corrine Png, CEO of Asian transport equity research firm Crucial Perspective, told Bloomberg that the loss would put the restructuring plans back on the drawing board. “Some of the recent restructuring plans has resulted in HNA Group, and ultimately Hainan Province Cihang Foundation, increasing control over the subsidiary and associate companies, instead of decreasing control,” she said in early July. “This may not sit well with the government.”
Jin Jiang Moves Forward
But HNA’s loss is Jin Jiang’s gain, and the company has been on an acquisition tear. Earlier this year, Jin Jiang bought control of Indian chain Sarovar Hotels, following its acquisition of European hospitality provider Groupe du Louvre. It also owns 12 percent of France’s Accor SA.
Radisson could not comment on the deal, but John Kidd, CEO and COO of Radisson Hospitality, (and former president/COO of HNA Hospitality Group) issued a statement praising HNA’s involvement: “HNA has been extremely supportive of our business along with the creation and execution of our five-year strategic plan. Our efforts to transform the company to date have helped make Radisson Hotel Group an extremely attractive acquisition target. We see an immense opportunity with Jin Jiang International to join one of the largest hotel companies in the world."
Transactions
Jin Jiang to buy Radisson Hospitality from HNA Group
by Jena Tesse Fox | Aug 10, 2018 3:00pm
That didn’t take long: Less than a week after rumors began circulating that Radisson Hotel Group might change hands from one Chinese conglomerate to another, a deal is in place. Hainan-based HNA Group has agreed to sell its holdings in Radisson Hospitality AB and Radisson Holdings to a consortium headed by Jin Jiang International Holdings, which is controlled by the Shanghai government.
The transaction could make Jin Jiang the world’s seventh-largest hotel operator with 344,000 rooms, STR estimates. Radisson Hotel Group's portfolio consists of more than 1,400 hotels operating or in development under its eight brands.
Under the terms of the deal, Jin Jiang agreed to buy 51.15 percent of Radisson Hospitality’s outstanding shares at 35 Swedish crowns ($3.87) per share, or a total of about 3 billion crowns ($332 million). Reuters estimated the offer price represents a 5-percent discount to the company’s stock price as of Thursday’s close. The consortium would then buy an additional 18.5-percent stake in Radisson Hospitality that HNA Sweden has pledged and transferred to a lender as security for a loan. After the share purchase, the consortium also would acquire 100 percent of Radisson Holdings for an undisclosed amount.
Last week, Bloomberg estimated HNA could earn at least $2 billion from the sale.
In total, HNA Group has sold more than $17 billion in assets this year to lower one of China’s biggest corporate debt piles.
HNA Offloads
The deal follows a recent trend of Chinese corporations offloading foreign assets in the wake of a national crackdown on international investments. In 2018 alone, HNA sold its shares of Hilton Worldwide Holdings and its spinoffs for a combined $8.5 billion, and began unloading its NH shares to Thailand’s Minor International.
HNA acquired Carlson Rezidor Hotel Group, now Radisson Hotel Group, two years ago in a move that some shareholders saw as a conflict of interest. At the time, HNA owned almost 30 percent of NH Hotels and Carlson Rezidor was viewed as a direct competitor. Subsequently, London hedge fund Oceanwood Capital Management, which owned a 10-percent stake in NH Hotel Group, called for the chairman of NH Hotel Group to temporarily stand down until the company resolved any conflict of interest related to HNA's buy of Carlson Rezidor.
Following the July death of HNA co-founder and co-chairman Wang Jian, HNA's future efforts to pay down its debts by selling assets seemed to be in doubt. Corrine Png, CEO of Asian transport equity research firm Crucial Perspective, told Bloomberg that the loss would put the restructuring plans back on the drawing board. “Some of the recent restructuring plans has resulted in HNA Group, and ultimately Hainan Province Cihang Foundation, increasing control over the subsidiary and associate companies, instead of decreasing control,” she said in early July. “This may not sit well with the government.”
Jin Jiang Moves Forward
But HNA’s loss is Jin Jiang’s gain, and the company has been on an acquisition tear. Earlier this year, Jin Jiang bought control of Indian chain Sarovar Hotels, following its acquisition of European hospitality provider Groupe du Louvre. It also owns 12 percent of France’s Accor SA.
Radisson could not comment on the deal, but John Kidd, CEO and COO of Radisson Hospitality, (and former president/COO of HNA Hospitality Group) issued a statement praising HNA’s involvement: “HNA has been extremely supportive of our business along with the creation and execution of our five-year strategic plan. Our efforts to transform the company to date have helped make Radisson Hotel Group an extremely attractive acquisition target. We see an immense opportunity with Jin Jiang International to join one of the largest hotel companies in the world."
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