Dalata Hotels rejects surprise £1.1b takeover bid

Ireland’s largest hotel operator, Dalata Hotel Group, has rejected a surprise €1.3bn (£1.1b) takeover bid from a Scandinavian consortium, claiming it undervalues the business.

Swedish hotel property company Pandox and Norwegian group Eiendomsspar had proposed a joint buyout of Dalata.

Their bid comprised a cash offer of €6.05 (£5.11) per ordinary share, representing a 27.1% premium on Dalata’s closing share price on 5 March, when it launched a strategic review of the business.

But just hours after the proposed buyout was announced, Dalata said it “unanimously rejected” the offer.

Dalata said: “The board of Dalata has considered the Pandox possible offer, together with its advisers, including in the context of its rigorous and ongoing formal sales process, and concluded that the Pandox possible offer materially undervalues the group and its prospects and has therefore unanimously rejected the Pandox possible offer.”

Dalata has a portfolio of 55 hotels across Europe, the majority of which are in the UK and Ireland, operating under the midscale Clayton and Maldron brands.

It is targeting further expansion and announced the strategic review ahead of a potential sale of the business in March.

Dalata said it was still undergoing a formal sale process and continuing to engage in “constructive discussions” with interested parties, several of whom have submitted their own proposals to buy the business.

It said the Pandox offer had been made independently after the Stockholm-based company declined to take part in the formal sale process on the terms set out by Dalata in March.

Dalata said in a statement: “The board remains committed to its ongoing strategic review and [formal sales process] and a further announcement will be made in due course as appropriate.”

Dalata saw revenue rise 7.3% in 2024 to £546m, while earnings before interest, taxes, depreciation and amortisation jumped 5.1% to £196.4m.

However, pre-tax profits for the year stood at £65.9m, down 12.7% on 2023.