The investment banking appetite for NH falters. The latest events surrounding Minor’s plans to increase its control over the Spanish hotel company mean that fewer and fewer analysts see this stock as an investment option. If less than a month ago more than 60% recommended buying, 37.5% holding and none selling, this scenario has completely changed in a matter of weeks. The advice to include it in the portfolio now represents less than a third, a balance that has tilted in favor of the ‘hold’ option (42.9%) and to sell (28.6%). In fact, more and more analysis houses are running away under the argument that they see no point in publishing by this company in the current circumstances.
One of the main reasons put forward by Deutsche Bank lies in its ‘free float’ level (percentage of shares available for trading on the market) which, although it is already low -less than 6%-, can be further reduced. The lack of information on the part of Minor about the roadmap that he plans to follow and his discrepancies with the body led by Rodrigo Buenaventura are the worrying factors, according to a report published. “Although the situation represents natural support for NH’s listing, it is difficult to understand what its final objective is,” they remarked in a report, while questioning why it continues to trade with such a low free float, “with all the limitations that entails” they emphasize.
They share this vision with XTB, from which they see it as “unfeasible” for it to continue operating in the financial markets, according to Darío García. The expert focuses on its volume of debt, which amounted to 340 million at the end of the first quarter, after repaying the ico the 50 million outstanding from the loan received during the pandemic for a total of 250 million. The investment bank defends itself that the company led by Ramón Aragonés is in a “special situation”, although it rules out delisting in the short term.
The intention of Minor, the majority shareholder, is to buy securities at market price after giving up on acquiring shares with a ceiling of 4.5 euros, an objective that he has not lost sight of. Between May 10 and 19, the Thai group acquired more than 4.3 million company shares, at different market prices ranging from 4.2 euros to which it rebounded intraday as soon as it was listed again until 4.5 euros with which it closed last Friday, according to information released by the National Securities Market Commission (CNMV). In total, it has been done with almost 1% of the capital, in such a way that its participation rises above 95% after not making any changes in the last five years.
These purchases have boosted the firm’s titles and it is already among the most appreciated values of the entire Spanish stock market so far this year with an advance of more than 51.5%. Almost half of this ‘rally’ has taken place in the last two weeks motivated precisely by the purchases of Minor. Since the suspension of the negotiation of their titles was lifted, tourism focused on urban hotels has gone from occupying the 18th position in terms of annual increases to fourth place. At the close of the European markets this Monday, it was only ahead of Tubos Reunidos (+226%), which flies on the stock market, Airtificial Intelligence (+60%) and Audax Renovables (+54%).
To put it in context, the Ibex 35 tourist companies, which coincidentally lead this index, have experienced a ‘rally’ below 40% with Amadeus (+39.7%) in the lead. The list is completed by IAG (+31.4%), Meliá (+29.7%) and Aena (+28.7%). NH’s shares have barely moved since they touched the 4.5 euro barrier a few days ago, a price that is expensive for analysts. The target price given by the ‘Bloomberg’ consensus is 4.19 euros, which means that at the present time it is trading almost 7% above what it should be.
This valuation contrasts with that of the CNMV, for which launching a takeover bid below the It should be remembered that the public purchase offer (takeover bid) that Minor prepared for months was knocked down by the regulator after setting a range for the purchase of shares of between 4.81 euros and 5.68 euros, according to a report commissioned to EY. After revealing that this fork is the resulting price between that stipulated by the consultant and the firm appointed by NH, which “set a lower range”, the Thais hold on to the convertible loan of 107 million that they were granted, in addition to the additional investment that it carried out in order to guarantee its liquidity, so as not to give up.
In fact, one of the main points of friction between the Asians and the wayward independents lies in the difference between the 6.3 euros paid by Minor in the initial takeover bid of 2018 and the 7.3 euros that an expert valued at March 2020 another possible takeover bid, which was suspended due to the pandemic. The failure to reach an agreement on this matter has even led to the resignation of three independent directors, including Alfredo Fernandez-Agras, until a few days ago president of NH and of the board of directors. The company is preparing his departure, along with José María Cantero and Fernando Lacadena, whom it has even threatened to take legal action, while it has promoted Dillip Rajakarier (Minor) to the presidency of the group and Ramón Aragonés to the vice-presidency. Some appointments that have been made, such as the company’s contribution to the CNMV on Monday, without the favorable report of the appointments and remuneration committee.
