Hotel chain eyes Dewsbury franchise as firm prepares for takeover showdown

Cypriot billionaire and entrepreneur Stelios Haji-Ioannou outside his latest venture easyHotel in London, "Photo credit should read ADRIAN DENNIS/AFP/Getty Images)
Cypriot billionaire and entrepreneur Stelios Haji-Ioannou outside his latest venture easyHotel in London, "Photo credit should read ADRIAN DENNIS/AFP/Getty Images)

Budget hotel chain easyHotel has received a takeover bid from an international consortium of investors, although it could be scuppered after the company's founder, Sir Stelios Haji-Ioannou, said he would reject it.

The chain, which opened two hotels in Leeds and Sheffield last year, has recommended that investors should accept the offer.

Canadian investment fund Ivanhoe Cambridge and Luxembourg-based ICAMAP Investments have offered to buy out current shareholders for 95p a share - a 35 per cent premium on the closing share price on Friday evening - valuing the business at £139m.

The firm has said it is actively looking for two more hotels in York and Harrogate. These will be owned by the firm, but the group is also looking to attract franchisees for further hotels in Bradford, Hull, Wakefield, Huddersfield and Dewsbury.

However, easyJet founder Sir Stelios, who still owns 27 per cent of easyHotel through his easyGroup investment company, urged other shareholders to follow his lead.

ICAMAP already holds a 38.7 per cent stake in easyHotel. The offer values the group, which has 38 hotels in 10 countries, at £139m. The bidders said the deal would allow easyHotel to expand more quickly to new locations.

Sir Stelios told shareholders: "I find the offer from ICAMAP to be very low and I urge all other shareholders to take no action (ie not accept the ICAMAP offer) until the true value and future potential of easyHotel can be evaluated."It should be noted ICAMAP themselves paid 110p (per share) only 18 months ago and the stock has been as high as 128p just 15 months ago."

The firm first joined the stock market five years ago, listing at 80p a share. The chain is targeted at the super-budget market.

Its chairman Jonathan Lane said the offer is fair and reasonable.

He added: "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, founding partner and managing director of ICAMAP, said: "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."

Investors seemed impressed with the offer and shares quickly jumped to 95p, matching the offer price.

In May, easyHotel revealed that sales jumped 25 per cent to £20.2m in the six months to March 31, but it slumped to a £124,000 pre-tax loss in the period due to the temporary closure of its hotel in London's Old Street, and depreciation.

The firm has previously said it plans to open five new hotels by the end of the year and nine more by 2020, at a cost of £49m.