Bankinter | The hotel chain plans to launch a hotel investment vehicle with financial partners who will contribute capital or assets. To this end, it has engaged EY and made initial approaches to potential interested parties.
Analysis team’s view: Good news for Meliã, as this strategy will allow it to continue growing in Spain without weakening its balance sheet. Faced with the increasing difficulty of finding new locations to contãinue growing, Meliã is seeking financial partners to acquire and reposition assets. Meliã’s aim would be to retain a 30% stake in the investment vehicle, through the contribution of assets already owned, with partners contributing capital or assets worth a further €1 billion. We expect a positive impact on the share price today, which we would use as an opportunity to take profits. We consider the rise in its share price over the past week (15%) to be excessive, as, although the war in Iran will continue to benefit tourism in Spain, hotel occupancy levels are already very high and the rise in inflation will also lead to increased costs. We are therefore taking advantage of the rises to take profits. We downgrade our recommendation to Sell from Buy and maintain our target price at €7.60 per share.
