Ireland's largest hotel group Dalata agrees to €1.4bn Scandinavian takeover

Reuters

Scandinavian property companies Pandox and Eiendomsspar AS have agreed to buy Ireland's largest hotel group Dalata for €1.4 billion, the companies said on Tuesday.

Dalata, which operates 56 hotels under the four-star Maldron and Clayton brands, mainly in Ireland and Britain, had rejected an initial bid from Pandox and Eiendomsspar in early June that had valued the hotel operator at €1.3 billion.

Sweden-based Pandox, which specialises in the ownership, development and leasing of large hotels across Sweden and northern Europe, will own 91.5 per cent of the entity taking over Dalata, while Norway-based Eiendomsspar will own 8.5 per cent, the companies said in a statement.

Pandox’s long-term operating partner, Scandic Hotels Group AB, will become an operating partner for the existing Dalata portfolio, the statement said.

Dalata chief executive Dermot Crowley said the deal was a "very good fit" as it gives Pandox a large portfolio in Britain and Ireland, and Dalata better access to capital and a larger platform to accelerate growth.

Dalata will continue to target new properties in the United Kingdom and western and southern Europe, he added.

Pandox chief executive Liia Nõu said the portfolio consisted of “well-established and highly profitable four-star hotels in strong locations” that would increase its footprint in key markets.

Under the deal, Dalata shareholders will get €6.45 in cash per share, representing a premium of about 12 per cent to the closing price on June 2nd – the day before the Scandinavian hotel investors first disclosed their interest in the Irish company.

The latest offer, which has the backing of the board, concludes the Dublin-based company's strategic review that was launched in March to drive up shareholder returns.