MADRID: Hyatt Hotels has backed away from launching a takeover of NH Hotels, days after a rival bidder Minor International Plc revealed it controlled 44% of the Spanish group.
In a letter from Hyatt released to the Spanish stock exchange by NH, the US hospitality company, which on Friday said it may launch a cash bid for 100% of NH, said it saw pursuing an offer as extremely challenging.
"Based on the information we now have, we believe that the path to a successful tender offer by Hyatt under the terms expressed in our letter has narrowed to a point of being impractical," Hyatt's President and Chief Executive Officer Mark Hoplamazian said in the letter released on Monday.
SET-listed Minor International made an offer in June which valued NH at up to 2.5 billion euros (US$2.9 billion).
Minor International already owns 29.8% with agreements in place to buy Chinese conglomerate HNA's 8.4% holding and Oceanwood Capital Management's 5.7% stakes. It said late on Friday it had control over 44% of NH's share capital.
Shares in NH dropped 6.4% on Monday to 6.3 euros per share, slightly below Minor International's offer price.
NH, with over 370 hotels in 30 countries, in January turned down a takeover offer from Spanish peer Barcelo which valued the company at 2.48 billion euros.
Minor International had agreed to pay HNA 622 million euros for a 26.5% stake in the hotel group, taking its stake to around 38% after the conversion of some bonds to shares. It would then offer 6.4 euros for each remaining share, it said.
NH said Minor's offer, approved by Spanish and Portuguese competition watchdogs, undervalued the company.
Spain, by far NH's biggest market with around a third of its hotels, became the second most visited country in the world after France in 2017, overtaking the United States.