Hispania has become the sole owner of Bay Hotels & Leisure by acquiring Grupo Barceló’s 19.5% of the company for an agreed price of 172,4 million euros, according to a statement filed by the socimi with the Spanish stock market regulator. Hispania is now the largest hotel owner in Spain.
The amount paid for the transaction includes the purchase of Barceló Hotels Mediterráneo’s stake in Bay Hotels & Leisure, as well as the liquidation of the incentive included in the shareholders’ contract, worth about 155 million euros. Hispania said this is equivalent to the dividend expected from Bay Hotels for 2017, namely 10,7 million euros, “as well as specific liquidating compensatory payments arising from the termination of the Contract between Shareholders and the novation of the Investment Contract.
The total price will be paid in two tranches: an initial payment of 80 million euros, which “was paid at the same time as the shares were transferred to Hispania,” the socimi noted. Then there is a second payment, for a total of 92,4 million euros, which Hispania will hand over on February 28, 2018. “At the same time, the contract foresees specific upwards adjustments in the price, agreed on in the event of Hispania reselling the stake it bought, always in the case of certain circumstances occurring,” the socimi adds.
Finally, Hispania said Grupo Barceló has informed Bay Hotels that it is excercising the sale option it had on the Barceló Marbella hotel worth 19 million euros. This operation is expected to be carried out before February 28, 2018.
The socimi Bay Hotels & Leisure, which has 21 hotels with 7,422 romos, is a real estate investment company focused on the acquisition, ownership, operation and eventual rotation of hotel properties, either directly or via subsidiaries. The socimi also owns various commercial centres and even a marina. The company was listed on the stock market last July and has a market value of over 500 million euros.
In Link Securities’ opinion, Hispania’s acquisition of Barcelo’s stake in Bay Hotels could be because it wants to monetise its portfolio of hotel assets, preparing it for a future sale.
“Hispania has a deadline for the sale of the portfolio of assets of March 2020, although we believe this could be brought forward to end-2019. We have a target price of 17,97 euros/share and our recommendation is to ACCUMULATE the stock.”