A CONSORTIUM LED by China-based Jin Jiang International Holdings plans to “squeeze-out” remaining minority owners of Radisson Hospitality AB after its most recent bid for the remaining in the company was approved my most stockholders. That bid left the consortium with 94.12 percent of the Radisson shares and votes, not the 100 percent buy out it needs to satisfy Swedish law.
In the acquisition in November, Jin Jiang purchased 50.21 percent as part of a consortium including private equity group SINO-CEE Fund. Doing business through Aplite Holdings AB, the consortium bought 87.6 million shares of Radisson AB for approximately $91.5 million from HNA Tourism Group Co., also based in China. Under Swedish law, Jin Jiang’s consortium was required to make a public offer for the remaining shares of the company or sell shares so the consortium’s ownership in the company falls below 30 percent of the votes in the company.
The consortiums made an initial offer on Dec. 11 of SEK 40 (US$4.46) per share, which the Independent Committee of the Board of Directors of Radisson had recommended against. The two companies bid again on Jan. 4 for SEK 42.50 (US$4.74) but still failed to get the committee’s approval, but the final decision came down to Radisson and HNA stockholders on Feb. 4.
Shareholders with 76,581,841 shares in Radisson AB, or approximately 43.91 percent of all shares, accepted the Jin Jiang consortium’s offer, adding their stock to make the 94.12 percent now controlled by Aplite.
“Since Aplite, following the offer, holds more than 90 percent of the shares in Radisson AB, Aplite intends to commence a squeeze-out procedure under the Swedish Companies Act to acquire all remaining shares in Radisson AB,” said a press release from Aplite. “Aplite also intends to request that the board of directors of Radisson AB applies for de-listing of Radisson AB’s shares from Nasdaq Stockholm.”
Under “squeeze-out” rules according to Thomson Reuters Practical Law, a company seeking the procedure must begin by requesting arbitration of the process by a panel of three arbitrators. The panel must decide if the bidder is entitled to squeeze out the remaining minority shareholders and ensures that the bidder provides sufficient security for the price of the shares, including interest.
“Where a public offer has been made to acquire all shares not already held by the bidder and acceptances for more than 90 percent have been tendered, the consideration for the remaining shares will be equivalent to the value of the offer consideration, unless there are any special reasons to justify a different amount,” Thomson Reuters said.
The special reasons include the passage of a long period of time since the offer is completed or the occurrence of a material change affecting the value of the offer. If one of those reasons occur, the consideration for the shares to be acquired must reflect their market value at the time the squeeze-out occurs.
“Aplite will inform the market once further steps of its announced plan are being implemented,” an Aplite spokesperson said.
HNA Group acquired the former Carlson Rezidor Hotel Group from the Carlson family in December 2016. In April, Radisson announced the company’s name change to Radisson Hotel Group, which includes Minnetonka, Minnesota-based Radisson Hospitality Inc. and Radisson Hospitality AB in Brussels, Belgium.
Radisson Hospitality Inc., also known as Radisson Holdings, oversees the company’s operations in the Americas and Asia Pacific. Radisson Hospitality AB is the company’s EMEA operations. Radisson AB is traded on the Swedish stock exchange.
After the July 3 death of HNA Group’s co-chairman Radisson found itself on the block as the company also sold off many of its other overseas investments.
Radisson Hotel Group has over 1,400 hotels and 220,000 guestrooms operating or in development under its eight global brands.
Radisson Hotel Group’s brands include Country Inn & Suites, Radisson, Radisson Blu and Radisson Red. Country Inn & Suites by Radisson marked its 30th anniversary last fall. Its growth in the U.S. was largely driven by Asian American franchisees.