EasyHotel bosses set for takeover showdown with Sir Stelios
Founder Sir Stelios Haji-Ioannou has urged investors to reject a 95p-a-share bid for the group, calling it ‘very low’.
The board of easyHotel is set for a clash with the company’s founder, Sir Stelios Haji-Ioannou, after it recommended that investors should accept an offer for the business.
But Sir Stelios, who still owns 27% of easyHotel through his easyGroup investment company, said he would be rejecting the 95p-a-share offer, and urged other shareholders to follow his lead.
The offer from Luxembourg investment group ICAMAP, which already holds a 38.7% stake in easyHotel, and Ivanhoe Cambridge, a Canadian-based pension fund, is 35% above the shares’ closing price on Friday night.
It values the group, which has 38 hotels in 10 countries, at £138.7 million and said the deal would allow easyHotel to expand more quickly to new locations.
The board of easyHotel has recommended shareholders accept the deal, but Sir Stelios could cause problems in scuppering the deal.
He said: “I find the offer from ICAMAP to be very low and I urge all other shareholders to take no action (ie not accept the ICAMAP offer) until the true value and future potential of easyHotel can be evaluated.
“It should be noted ICAMAP themselves paid 110p (per share) only 18 months ago and the stock has been as high as 128p just 15 months ago.”
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EasyHotel first joined the stock market five years ago, listing at 80p a share. Sir Stelios said it was aimed at the super-budget market.
But chairman Jonathan Lane said the offer is “fair and reasonable”.
He added: “If accepted, the offer should enable the easyHotel group to accelerate its expansion into major European cities where it sees significant opportunity, underpinning the long-term growth and prosperity of the easyHotel brand.”
Harm Meijer, founding partner and managing director of ICAMAP, said: “We continue to believe in the long-term strategy of the business. However, we also believe that the company needs a change in its shareholder base in order for easyHotel to become a true leading pan-European budget hotel player.”
Investors seemed impressed with the offer, and shares quickly jumped to 95p – the offer price – in early trading on Monday.
In May, easyHotel revealed that sales jumped 25.3% to £20.2 million in the six months to March 31. But it slumped to a £124,000 pre-tax loss in the period due to the temporary closure of its hotel in London’s Old Street, and depreciation.
Founded in 2004, easyHotel has 11 owned hotels with 1,200 rooms, and 25 franchised hotels with about 2,100 rooms.
Bosses had previously said they plan to open five new hotels by the end of the year and nine more by 2020, at a cost of £49 million.
One of the reasons the bidders want to take it private is to give bosses more access to funds to increase expansion.
EasyHotel has grown rapidly in recent years, although it got caught up in the collapse of LateRooms last week.
Super Break, one of LateRooms’ owner’s websites, collapsed less than 24 hours after it announced a partnership with easyHotel. It had approximately 20,000 bookings, involving around 53,000 people.