Marriott's deal to buy Elegant Hotels Group in Barbados, nearly done
The Marriott Hotel name may be seen more around Barbados.
Seven hotels in Barbados may soon fall under the Marriott brand.
Marriott is completing the steps to sweep up its competitor - Elegant Hotels Group, in a multimillion-dollar acquisition.
There already is a Courtyard by Marriott in Hastings, Barbados, whose parent is Marriott International Inc., but Courtyard by Marriott is a no frills, no bells and whistles style of hotel designed for business travellers. With this purchase of the Elegant Hotels Group, Marriott International Inc. will be gaining a chunk of the all-inclusive pie that it has its eyes set upon.
In a press release on its website on Friday, Marriott International (NASDAQ: MAR) announced that 'the company has reached an agreement with the board of Elegant Hotels Group plc (LON: EHG; “Elegant”) on the terms of a recommended all-cash offer for Elegant.
Under the terms of the offer, each Elegant shareholder would be entitled to receive 110 pence per Elegant share or roughly BBD $2.86. The offer values the entire issued and to be issued ordinary share capital of Elegant at approximately £100.8 million (USD$130.1 million based on £1:$1.29).' This figure is around BBD $262 million.
The statement explained:
'The offer price implies an enterprise value for Elegant of approximately $199.0 million based on Elegant’s total net debt of $68.9 million as at March 31, 2019 as set out in Elegant’s most recent half-year report for the six months ended March 31, 2019.'
In Barbados, Elegant owns and operates seven hotels with 588 rooms and a beachfront restaurant, with six of the properties located along the west coast of Barbados - the “Platinum Coast.” Majority of Elegant properties are operated as all-inclusive resorts and this is the direction that Marriott wants to move in presently.
President and Chief Executive Officer, Marriott International, Arne Sorenson said in the release, “There is a strong and growing consumer demand for premium and luxury properties in the all-inclusive category.
“The addition of the Elegant portfolio will help us further jump start our expansion in the all-inclusive space, while providing more choices on the breathtaking island of Barbados for our 133 million Marriott Bonvoy members.”
According to Marriott International's News page:
'Following the acquisition, Marriott intends to carry out renovations to the hotels in the Elegant portfolio. Upon completion of the planned property renovations, Marriott intends to operate all the Elegant hotels as all-inclusive resorts under one or more of Marriott’s collection brands. In keeping with Marriott’s asset-light strategy, over time, Marriott also intends to market the Elegant hotels for sale subject to long-term management agreements under which Marriott would continue to manage the hotels.
'In August, Marriott launched an all-inclusive platform with the goal of growing a worldwide portfolio of resorts in popular vacation segments by leveraging the company's operational and development expertise, its Marriott Bonvoy travel program with roughly 133 million members, and its iconic hotel brands.
'Completion of the transaction is subject to satisfaction or waiver of the offer conditions set out in the offer announcement, including approval by Elegant shareholders.
'This announcement should be read in conjunction with the full text of the announcement of the offer for Elegant which will be available shortly on the Marriott website at www.marriott.com/investor.'