Corinthia Group’s IHI to acquire Island Hotels

International Hotel Investments (IHI) has announced that it has entered into a conditional agreement for the acquisition of Island Hotels Group.

IHI has indicated a tentative value of €106.5 million and net equity value of Island Hotels Group of €50 million.

“IHI believes that an acquisition of IHGH’s assets, management expertise and businesses will contribute significant synergies, gains and benefits to IHI’s objectives,” company secretary Alfred Fabri said.

“These include operational synergies across the board and additional development opportunities that will arise as a result of an amalgamation of IHGH’s hotel operation in St George’s Bay with that of IHI’s own neighbouring hotels.”

Both companies are also actively involved in the catering sector, in Malta and overseas, and the acquisition of IHGH’s assets, experience and contracts by IHI will create efficiencies in existing operations all round, and provide a stronger platform for international growth.

The conditional agreement regulates the mechanics of how the objective to acquire all of the IHGH shares could be achieved, and on terms that will be equal to all shareholders in IHGH.

The agreement is subject to the satisfaction of various conditions over the coming months, including but not limited to, compliance with regulatory requirements and obtaining shareholders’ approvals, as and where necessary, as well as, among other terms and conditions, conducting a satisfactory due diligence on IHGH.

Based on the completion of a satisfactory due diligence, and the indicative value confirmed, IHI has indicated that it would proceed with a voluntary offer for all the shares of IHGH in which the price for IHGH shares would be paid as to €1 in cash, split into two tranches, the first tranche of €0.55c payable on completion and the second tranche payable 12 months later.

In addition to this cash component, IHGH shareholders will also receive 0.246 IHI shares for each IHG share held, through the issue of 9 million shares by IHI.

It is expected that IHI will make a further announcement confirming the terms and conditions upon which IHI shall proceed to make a voluntary offer for all the shares in IHGH in the event that all conditions are ultimately satisfied.