Budget hotel chain easyHotel has agreed the terms for a £139m takeover with a consortium of investment firms.
Bidco, a newly incorporated company owned by Cadim Fonds (part of Ivanhoé Cambridge) and ICAMAP Investments, has made an offer for the hotel firm worth around £138.7m.
ICAMAP is already the largest shareholder in easyHotel, with a 38.65% stake, having invested a total of around £58m in the company in 2016 and 2018.
Ivanhoé Cambridge and ICAMAP said they formed a consortium to take over the hotel operator because the current structure of its shareholder base is “ill-suited” to attracting new capital.
The deal, which easyHotel’s directors urged shareholders to accept, represents a multiple of around 36.7 times easyHotel’s earnings before interest, depreciation, tax and amortisation (EBITDA) of £3.4m for the 12 months to 31st March 2019.
However, company founder Sir Stelios Haji-Ioannou, who still has a 27% share in the business, claimed the offer was “very low”. “I urge all other shareholders to take no action until the true value and future potential of easyhotel can be evaluated,” he said in a statement.
Jonathan Lane, chairman of easyHotel, said: “The independent easyHotel directors consider that the offer is fair and reasonable and in the best interests of shareholders, the company, its employees and wider stakeholders. Liquidity in easyHotel stock has been limited since the company was admitted to AIM five years ago. If accepted, the offer should enable the easyHotel group to accelerate its expansion into major European cities where it sees significant opportunity, underpinning the long-term growth and prosperity of the easyHotel brand.”
Harm Meijer, managing director of ICAMAP and one of its founding partners, said: “We have been a shareholder in easyHotel since October 2016 and have been the principal supporter of two capital raises. We continue to believe in the long-term strategy of the business. However, we also believe that the company needs a change in its shareholder base in order for easyHotel to become a true leading pan-European budget hotel player. In our view, Ivanhoé Cambridge and ICAMAP are ideally positioned to provide the capital and stewardship the company needs. Our offer enables shareholders to exit from an illiquid stock at a 34.8%. premium and, we believe, will result in greater clarity of ownership and direction for the company and its management team. We are open- minded about whether easyHotel remains a publicly traded company or becomes private. In either case, we believe that the change of ownership which our offer will deliver is essential to enable easyHotel to navigate the current market uncertainty and to thrive in the future.”