Belmond Ltd (NYSE: BEL)
Belmond Hotel Group, the owner of Venice’s Hotel Cipriani and Orient Express train service, is going to be acquired by LVMH in a deal worth $3.2 billion. The group runs luxury restaurants, hotel, and river cruise services across 24 countries, from St Petersburg in Russia to Anguilla in the Caribbean.
LVMH is the company behind Christian Dior and Louis Vuitton fashion labels, and owns other hotels including Bulgari hotels, as well as Cheval Blanc chain in locations such as Maldives and St Barts.
The luxury brands giant is betting on Belmond to boost its existing portfolio of hotels. Adding Belmond gives LVHM a portfolio of trophy assets and increases its exposure to hospitality.
Under the terms of the agreement, Belmond will receive $25.00 in cash from LVMH for each class A share, representing a premium of 42% over the stock’s closing price of $17.65 on the NYSE on Thursday. The deal has an equity value of $2.6 billion, but LVMH used the enterprise value that includes preferred shares and debt, at $3.2 billion.
The companies hope to close the transaction in the first half of calendar 2019. However, it’s still subject to customary closing conditions, including approval by shareholders of Belmond. Shares of Belmond Ltd were up $7.04, or 39.89% to change hands at $24.69 in the final hour of regular trading on Friday. Meanwhile, LVHM shares closed at €255.85, after climbing 0.6% on Thursday in Paris.
Belmond CEO Comments
Bernard Arnault, Chairman and Chief Executive Offer of LVMH, commented: “Belmond delivers unique experiences to discerning travelers and owns a number of exceptional assets in the most desirable destinations. Its heritage, its innovative services, its excellence in execution and its entrepreneurship resonates well with the values of the Group and is complementary to our own Cheval Blanc maisons and the Bvlgari hotels activities. This acquisition will significantly increase LVMH’s presence in the ultimate hospitality world.”
Belmond Ltd Company Profile
Belmond Ltd. engages in the hotel and travel businesses. As of December 31, 2017, the company owned, invested in, or managed 36 deluxe hotels and resort properties in the United States, Mexico, The Caribbean, Europe, Southern Africa, South America, and Southeast Asia; 1 stand-alone restaurant in New York; 7 tourist trains in Europe, Southeast Asia, and Peru; 1 river cruise in Myanmar; and 1 canal boat business in France.
Its portfolio of hotels includes 3,203 individual guest rooms and multiple-room suites. The company was formerly known as Orient-Express Hotels Ltd. and changed its name to Belmond Ltd. in June 2014. Belmond Ltd. was founded in 1971 and is based in Hamilton, Bermuda. – Yahoo Finance