Jardine Matheson is acquiring the remaining 11.96% of Mandarin Oriental for US$3.35 per share, bringing the company’s total valuation to about US$4.2 billion ($5.44 billion).
Jardine Matheson’s wholly-owned subsidiary Bidco will acquire the remaining stake, and the acquisitions will be implemented by way of a scheme arrangement. This involves a US$2.75 scheme value and the US$0.60 special dividend from the hotel group’s sale of part of One Causeway Bay (OCB), a commercial development in Hong Kong.
The sale price represents a 52.3% premium to Mandarin Oriental’s closing price of US$2.20 on Sep 29, and a 53.7% premium to its net asset value of US$2.18 per share as at June 30.
Mandarin Oriental announced earlier on Oct 17 its sale of the top 13 floors of One Causeway Bay for US$925 million to Alibaba and Ant Group.
Jardine Matheson has been a long-time controlling shareholder in Mandarin Oriental, holding 88.04% of the company. The group says that this acquisition is consistent with Jardine Matheson’s strategy to deliver superior, long-term returns from its portfolio of market-leading businesses focused on Asia and is aligned with a group-wide capital allocation framework.
“The Jardine Matheson Board considers full private ownership as beneficial for both Mandarin Oriental and Jardine Matheson. Privatization of Mandarin Oriental would simplify Jardine Matheson’s existing corporate structure, while better supporting Mandarin Oriental in achieving its growth objectives,” reads the bourse filing on Oct 17.
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Jardine Matheson intends to finance the scheme value through cash on its balance sheet together with committed facilities.
Shares in Jardine Matheson closed 48 US cents higher or 0.79% up at US$61.13 on Oct 17.
