Marriott International Inc (NASDAQ: MAR) are set to agree the purchase of Elegant Hotels Group PLC (LON: EHG) which has caused the share price of Elegant to soar through the roof.
Marriott International are set to payout 110p per share in cash for Elegant, giving the Marriott Group huge pathways into the Caribbean market.
The agreed deal of 110p per share saw a 57% premium to its price at the close of Thursday trading.
THIS values the AIM listed company at £100.8 million, based on Elegant’s enterprise value of US$199 million and net debt of $68.9 million.
Arne Sorenson U.S. hotelier’s chief executive officer said ““There is a strong and growing consumer demand for premium and luxury properties in the all-inclusive category”
Elegant Hotels , a firm based in St Lucia went public in 2015 and shareholders have seen a surge in their holdings since the move was proposed.
This drives Marriott’s intentions to tap into international markets, particularly in the Caribbean market after the acquisition of Starwood Hotels & Resorts.
The Caribbean retailer said it had faced tough tests due to fluctuations in the sterling, which had hit its share price, reducing the opportunities to pursue growth strategies leading to a change in direction from seniors. This comes as a response from competitors such as Whitbread (LON: WTB) combatting low profits.
Elegant’s non-executive chairman Simon Sherwood. “The board of Elegant Hotels is confident in the group’s long term prospects but believes that this offer represents compelling value for our shareholders and a great opportunity for our employees to be part of one of the world’s leading hotel companies,”
Currently shares in Elegant Hotels are trading at 109.4p per share, seeing a 56.29% surge during the early hours of Friday trading. 18/11/2019 10:34BST.
The decision by Elegant will allow massive expansion opportunities, and will allow Marriott to stampede their dominance in the Caribbean market.