Mandarin Oriental shares jump 36% after privatisation offer from Jardine Matheson
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The deal, if it goes through, could result in the privatising and delisting of the hotel group from SGX.
PHOTO: REUTERS
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- Jardine Matheson offered US$3.35 per share to acquire the remaining 11.96% stake in Mandarin Oriental, valuing it at US$4.2 billion.
- Mandarin Oriental shares surged 36% to US$3.28 after the offer, which included a special dividend from a US$925 million property sale.
- Privatisation would simplify Jardine Matheson's structure and support Mandarin Oriental's growth, including new hotels in Seoul and Xi'an.
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SINGAPORE – Shares of Mandarin Oriental surged when the market opened on Oct 21, as investors responded to a privatisation offer for the hotel chain from controlling shareholder Jardine Matheson.
The latter announced on Oct 17 after the market closed that it is acquiring an 11.96 per cent stake in Mandarin Oriental for US$3.35 per share, valuing the luxury hotel group at about US$4.2 billion (S$5.4 billion).
Mandarin Oriental’s shares jumped by more than 36 per cent to US$3.28 shortly after trading commenced on Oct 21 before ending the trading day at US$3.27. Shares of Jardine Matheson rose 7.8 per cent to US$65.90 on Oct 21.
The offer price of US$3.35 per share comprises US$2.75 per share in cash and a special dividend of 60 US cents from the hotel group’s recent sale of the top 13 floors of its One Causeway Bay
Mandarin Oriental is selling the 13 floors for US$925 million to Alibaba and Ant Group, which will utilise the space as their headquarters in Hong Kong, it said in an exchange filing on Oct 17.
Mandarin Oriental currently operates 43 hotels, 12 residences and 26 homes in 26 countries, including a hotel in Singapore.
Jardine Matheson’s offer price for Mandarin Oriental represents a 52.3 per cent premium to the hotel group’s closing price of US$2.20 on Sept 29, which is the last business day prior to its announcement on the possible sale of the 13 floors of One Causeway Bay on Sept 30.
It is also a 53.7 per cent premium to the hotel group’s net asset value of US$2.18 per share as at June 30.
Jardine Matheson already owns 88.04 per cent of Mandarin Oriental. The deal, if it goes through, could result in the privatising and delisting of the hotel group from the Singapore Exchange (SGX).
“Privatisation of Mandarin Oriental would simplify Jardine Matheson’s existing corporate structure, while better supporting Mandarin Oriental in achieving its growth objectives,” Jardine Matheson noted in a bourse filing on Oct 17.
The conglomerate’s offer to privatise Mandarin Oriental comes at a time when the hotel chain is expanding into new markets, including South Korea with the development of a luxury hotel in Seoul, scheduled to open in 2030, and north-western China, with the opening of Mandarin Oriental Xi’an expected in 2029.
Besides the hotel chain, Jardine Matheson is also the controlling shareholder of Hongkong Land, Jardine Cycle and Carriage and DFI Retail Group, which are also listed on SGX.
