Hyatt Hotels backed away from launching a takeover of NH Hotels days after a rival bidder Minor revealed it controlled 44% of the Spanish group.
In a letter from Hyatt released to the Spanish stock exchange by NH, the US hospitality company, which on Friday July 27 said it may launch a cash bid for 100% of NH, said it saw pursuing an offer as extremely challenging.
"Based on the information we now have, we believe that the path to a successful tender offer by Hyatt under the terms expressed in our letter has narrowed to a point of being impractical," Hyatt's President and Chief Executive Officer Mark Hoplamazian said in the letter.
Thailand-based Minor International made an offer in June which valued NH at up to €2.5 billion.
Minor already owns 29.8% with agreements in place to buy Chinese conglomerate HNA's 8.4%holding and Oceanwood Capital Management's 5.7% stakes. It said late on Friday July 27 it had control over 44% of NH's share capital.
NH, with over 370 hotels in 30 countries, in January turned down a takeover offer from Spanish peer Barcelo which valued the company at €2.48 billion.
Minor had agreed to pay HNA €622 million for a 26.5% stake in the hotel group, taking its stake to around 38% after the conversion of some bonds to shares. It would then offer €6.4 for each remaining share, it said.
NH said Minor's offer, approved by Spanish and Portuguese competition watchdogs, undervalued the company.
Spain, by far NH's biggest market with around a third of its hotels, became the second most visited country in the world after France in 2017, overtaking the United States.