The independent committee of the board of directors of Radisson Hospitality AB recommended that its shareholders turn down the mandatory public offer of the Jin Jiang International (Holdings) Co. Ltd.-led consortium.
Additionally, Rothschild & Co., which was tapped to provide a fairness opinion, said the proposed cash consideration of 40 Swedish kronor per share is "not fair from a financial point of view." Under the offer, the consideration will be reduced in line with any dividend paid or another value transfer made to the shareholders on a record date that precedes the settlement of the offer price.
In making the recommendation, the independent committee considered a number of factors, including Radisson's present strategic and financial position, expected potential future development, and related opportunities and risks, according to a release.
Radisson said the consortium was allowed to carry out a limited confirmatory due diligence review in preparation for the offer and has not received any inside information about the company during the investigation period.
The offer is scheduled to commence on or around Jan. 7 and expire on around Feb. 1, subject to extensions.
The independent committee expects that the liquidity of Radisson shares may diminish further and that the Belgian hotelier's ownership structure may become more concentrated because of the offer.
The committee also added that it has no reason to question the consortium's statement that it does not foresee any significant changes or adverse effects from the completion of the offer for Radisson's organization, employees, the terms of their employment, or the locations where the company carries out its operations.
Separately, the consortium that includes SINO-CEE Fund will buy a maximum of roughly 18.16% of additional shares and votes in Radisson from HNA Sweden Hospitality Management AB, an indirect wholly owned subsidiary of the former majority owner HNA Tourism Group Co. Ltd. The suitor already owns a 50.21% stake in Radisson as of November 2018.
Andreas Schmid chaired the independent committee that also includes directors Lo Kin Ching, Wolfgang Neumann, Thomas Staehelin, Göran Larsson and Ulf Petersson. The committee enlisted Benedetto Gartland & Co. as financial adviser and Gernandt & Danielsson Advokatbyrå as legal adviser.
As of Jan. 1, US$1 was equivalent to 8.86 Swedish kronor.