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.
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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.
News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.