Dalata rejects surprise €1.3bn bid from Scandinavian consortium

Dalata Hotel Group said on Tuesday afternoon that it has rejected a €1.3 billion bid from Swedish peer Pandox, which owns hotels run under the Leonardo brand in Ireland, and a leading shareholder in the Irish company, Oslo-based Eiendomsspar.

Eiendomsspar owns about 8.8 per cent of Dalata and 24.8 per cent of Pandox.

Dalata said that the €6.05-a-share cash offer, which is non-binding, “materially undervalues the group and its prospects”. The group put a net value of €1.42 billion on its assets at the end of 2024.

The bid came as a surprise as the Pandox-Eiendomsspar consortium had not been involved in a formal sale process, managed by investment bank Rothschild, that has been going on in recent months.

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“The board confirms it continues to engage in constructive discussions with a number of parties who are participating in the formal sale process (FSP) and who have submitted initial non-binding proposals,” Dalata said. “Pandox is not a participant in the FSP, having declined to enter the process on the terms of the process set out in the group’s announcement dated 6 March 2025.”

The Scandinavian suitors said in a statement earlier in the day they believed their proposal “would deliver tangible and certain value” for Dalata shareholders, fully in cash and at a meaningful premium. It was not clear whether they plan to make a revised bid.

Shares in Dalata were up 5.6 per cent at €6.08 in midafternoon trading.

“As established hotel investors with deep knowledge of the European hospitality sector, and experience from successfully executing similar transactions in the UK and Ireland, the consortium is well-positioned to support Dalata’s business and long-term growth ambitions,” the consortium, which is being advised by Goodbody Stockbrokers, said in its statement.

Stockholm-listed Pandox owns 163 hotel properties with approximately 36,000 rooms across 11 countries in Europe. The portfolio includes hotels at Christ Church in Dublin, Cork, Galway and Belfast which are operated by Fattal Hotel Group’s Leonardo Hotels unit.

Eiendomsspar, a property firm with a history of large investments in hotels, first emerged with a disclosable stake above 3 per cent in Dalata at the end of October. The company added to its stake the following month. But its chief executive, Sigurd Stray, sought to contain speculation at the time that it could amount to a strategic stake-build, telling The Irish Times he saw it as a “financial investment” that would “hopefully provide a fair return over time”.

Mr Stray declined to comment on whether Eiendomsspar would have an interest in bidding for Dalata when The Irish Times asked him in March, shortly after the sale process was launched.

The consortium said that it was in negotiations with a “reputable European hotels’ operator” to conclude a framework agreement for the operation of the Dalata hotels should the consortium acquire Dalata.

Eiendomsspar also owns a 14.7 per cent stake in Scandic Hotel Group, which runs 264 hotels, mainly on short-term leases.

The board of Dalata, which floated on the stock market in 2014, hired investment bank Rothschild to carry out a strategic review of the business in March, following a sustained period of underperformance by the stock. The shares have subsequently rallied.

US investment firms Starwood Capital, Davidson Kempner, TPG, Apollo, Bain and KSL are among parties that recently submitted bid proposals for Dalata, according to property news services Green Street. Sources have independently confirmed that Starwood, Davidson Kempner, Apollo and Bain are in the mix. An affiliate of Starwood already owns 2.7 per cent of Dalata.

Davy and Berenberg are also advising Dalata, alongside Rothschild.

Barry English, founder of data centre builder Winthrop Technologies, emerged last week as a shareholder in Dalata, with his family investment vehicle, Penman Securities Trading, declaring a 1.12 per cent stake.

Mr English owns the five-star Mount Juliet Estate hotel and golf resort in Kilkenny, acquired late last year, and Johnstown Estate Hotel and Trim Castle Hotel, both in Co Meath. However, the recent move to increase its shares in Dalata is seen as a value play amid the sales process, rather than a signal of bid interest.

Dalata’s three largest shareholders, London-based hedge fund Helikon Investments, Saudi conglomerate Zahid Group and Eiendomsspar, have each added marginally to their stakes in the Dublin-listed company since the “for sale” sign was raised. Helikon own owns 17.4 per cent, Zahid Group, 10.6 per cent, and Eiendomsspar, 8.8 per cent. Eiendomsspar owned about 8.5 per cent before the sales process kicked off.