Interesting comments on JLH and its valuation from its analyst Hardman and Co.
http://hardmanandco.com/Research/JPLH_Dec2010.pdf
It is very interesting that Hardman believes that Japan Leisure Hotel's hotels should be valued in line with international hotel chain valuations; when it is common knowledge in Japan that Leisure Hotels or Love Hotels trade at much bigger caprates compared to their traditional hotel cousins in Japan
In the current market climate in Japan; combined with lack of financing, JLH's poor performance (most recently posting a loss in H1 2010) and also the upcoming regulatory change in the LH industry http://japanrealestatecommentary.blogspot.com/2010/05/japan-leisure-hotels-law-to-change.html
it is difficult to see any buyer emerging for the Bonita hotel chain
Tuesday, December 28, 2010
Japan Leisure Hotels - Board Statement
20 December 2010
Japan Leisure Hotels Limited
("JPLH" or the "Company")
Potential Offer for the Company
Funds managed by DKR Oasis Management Company, LP ("DKR Oasis") own approximately 87.6% of the Company's issued share capital. DKR Oasis recently informed the Board that it wanted to exit its investment in the Company and was taking active steps to achieve this end. There are a number of ways such an exit could be structured including an offer being made for its shares or a sale of the Company's assets.
The Takeover Panel has ruled that an offer for the Company will be subject to the City Code on Takeovers and Mergers (the "Code"). If an offer is made under the Code, DKR Oasis is in a position to deliver control of the Company by selling its shares (in which event the buyer will be required to make a cash offer on no less favourable terms to the remaining minority shareholders) or by providing an irrevocable undertaking to accept a takeover offer made for the Company's shares.
Under the AIM Rules, the Company cannot liquidate its assets without first obtaining the approval of shareholders in general meeting. At any such meeting, DKR Oasis would be in a position to vote through the required resolution. Although DKR Oasis does not currently control the Board, and so cannot force the Board to enter into contracts to liquidate its investments in the Bonita hotel portfolio, DKR Oasis can under Guernsey law gain control of the Board or requisition shareholder meetings to achieve its ends should it wish to do so.
The Board has recently been working with DKR Oasis to help maximise any sale proceeds for the benefit of all shareholders but it is not anticipated that the proceeds of any offer for the Company will deliver a premium to the current share price and it may even result in a discount.. Also, a sale of the assets to realise value in the short term is likely to be at a substantial discount to the previously announced net asset value per ordinary share which was based on the value of the assets on a going concern basis..
The Board believes that given additional time it might be possible to deliver greater value to shareholders than has been offered to date and is in discussions with DKR Oasis to explore whether it would be prepared to exit its investment in the Company over a longer timeframe.
The Board is willing to consider proposals from any new party interested in considering an offer for the Company or its assets. The asset manager New Perspective has indicated its willingness to continue as manager or alternatively to resign in order to facilitate any preferred exit structure
A further announcement updating shareholders will be made when appropriate. There can be no certainty that any offer will be made nor as to the terms on which any offer may be made.
In accordance with Rule 2.10 of the Code, the Company confirms that, as at 20 December 2010, it had 44,100,002 ordinary shares in issue. The International Securities Identification Number (ISIN) reference for these securities is GG00B28QMS50 and the SEDOL code is B28QMS5.
In accordance with Rule 19.11 of the Code, a copy of this announcement will be published on the Company's website: www.japanleisurehotels.com.
http://www.investegate.co.uk/article.aspx?id=201012201506323044Y
Japan Leisure Hotels Limited
("JPLH" or the "Company")
Potential Offer for the Company
Funds managed by DKR Oasis Management Company, LP ("DKR Oasis") own approximately 87.6% of the Company's issued share capital. DKR Oasis recently informed the Board that it wanted to exit its investment in the Company and was taking active steps to achieve this end. There are a number of ways such an exit could be structured including an offer being made for its shares or a sale of the Company's assets.
The Takeover Panel has ruled that an offer for the Company will be subject to the City Code on Takeovers and Mergers (the "Code"). If an offer is made under the Code, DKR Oasis is in a position to deliver control of the Company by selling its shares (in which event the buyer will be required to make a cash offer on no less favourable terms to the remaining minority shareholders) or by providing an irrevocable undertaking to accept a takeover offer made for the Company's shares.
Under the AIM Rules, the Company cannot liquidate its assets without first obtaining the approval of shareholders in general meeting. At any such meeting, DKR Oasis would be in a position to vote through the required resolution. Although DKR Oasis does not currently control the Board, and so cannot force the Board to enter into contracts to liquidate its investments in the Bonita hotel portfolio, DKR Oasis can under Guernsey law gain control of the Board or requisition shareholder meetings to achieve its ends should it wish to do so.
The Board has recently been working with DKR Oasis to help maximise any sale proceeds for the benefit of all shareholders but it is not anticipated that the proceeds of any offer for the Company will deliver a premium to the current share price and it may even result in a discount.. Also, a sale of the assets to realise value in the short term is likely to be at a substantial discount to the previously announced net asset value per ordinary share which was based on the value of the assets on a going concern basis..
The Board believes that given additional time it might be possible to deliver greater value to shareholders than has been offered to date and is in discussions with DKR Oasis to explore whether it would be prepared to exit its investment in the Company over a longer timeframe.
The Board is willing to consider proposals from any new party interested in considering an offer for the Company or its assets. The asset manager New Perspective has indicated its willingness to continue as manager or alternatively to resign in order to facilitate any preferred exit structure
A further announcement updating shareholders will be made when appropriate. There can be no certainty that any offer will be made nor as to the terms on which any offer may be made.
In accordance with Rule 2.10 of the Code, the Company confirms that, as at 20 December 2010, it had 44,100,002 ordinary shares in issue. The International Securities Identification Number (ISIN) reference for these securities is GG00B28QMS50 and the SEDOL code is B28QMS5.
In accordance with Rule 19.11 of the Code, a copy of this announcement will be published on the Company's website: www.japanleisurehotels.com.
http://www.investegate.co.uk/article.aspx?id=201012201506323044Y
Japan Leisure Hotels - Main Investor to Exit
Following the half year loss posted by Japan Leisure Hotels in H1 2010; it has been announced by the Board of JLH that its main investors, DKR Oasis, is looking to exit either by selling its shares in a TOB under the Takeovers Code or by Japan Leisure Hotels selling its hotels. According to the Financial Times, this could mean that Japan Leisure Hotels will be listed from AIM.
the FT says -
One of the more colourful companies on Aim looks set to join the hundreds that have left the junior market over the past two years.
Japan Leisure Hotels operates a portfolio of so-called love hotels, one of those Japanese idiosyncrasies that make sense to the country’s inhabitants.
They act as a refuge for married couples who live with family, philanderers and those – often backpacking foreigners – looking for a cheap room for the night.
Japan Leisure’s biggest shareholder is DKR Oasis Management, which has an 87.6 per cent stake. It has told the board it wants to realise its investment. Japan Leisure said it did not expect the proceeds of any offer to “deliver a premium to the current share price, and it may even result in a discount”.
In the short term, said the company, a sale was likely to be at a substantial discount to the previously announced net asset value per share of 77p, based on the value of the assets on a going concern basis.
Japan Leisure tried to raise £100m when it listed in 2007, convinced that it would be able to consolidate the fragmented Japanese industry. In the event it had to settle for £3m at 50p a share, leaving DKR Oasis with its large stake. Another attempt at a £50m fundraising in 2009 failed.
The shares fell 2½p to 23p on Tuesday, giving a market capitalisation of £10m.
The Takeover Panel has ruled that any offer will be subject to the City Code, so any buyer would have to offer similar terms to minority shareholders. The board is willing to consider proposals from any new party for either the company or its assets.
The board believes that given additional time it might be possible to deliver greater value to shareholders than has been offered to date, and it is talking to DKR Oasis to see if it “would be prepared to exit its investment over a longer time frame”.
So far this year 178 companies have delisted from Aim, against 293 departures in 2009. The total number of companies on the junior market fell below 1,200 at the end of November, the lowest level since 2004.
http://www.ft.com/cms/s/0/15a512b6-0d2e-11e0-82ff-00144feabdc0.html#axzz19RwfLEcf
the FT says -
One of the more colourful companies on Aim looks set to join the hundreds that have left the junior market over the past two years.
Japan Leisure Hotels operates a portfolio of so-called love hotels, one of those Japanese idiosyncrasies that make sense to the country’s inhabitants.
They act as a refuge for married couples who live with family, philanderers and those – often backpacking foreigners – looking for a cheap room for the night.
Japan Leisure’s biggest shareholder is DKR Oasis Management, which has an 87.6 per cent stake. It has told the board it wants to realise its investment. Japan Leisure said it did not expect the proceeds of any offer to “deliver a premium to the current share price, and it may even result in a discount”.
In the short term, said the company, a sale was likely to be at a substantial discount to the previously announced net asset value per share of 77p, based on the value of the assets on a going concern basis.
Japan Leisure tried to raise £100m when it listed in 2007, convinced that it would be able to consolidate the fragmented Japanese industry. In the event it had to settle for £3m at 50p a share, leaving DKR Oasis with its large stake. Another attempt at a £50m fundraising in 2009 failed.
The shares fell 2½p to 23p on Tuesday, giving a market capitalisation of £10m.
The Takeover Panel has ruled that any offer will be subject to the City Code, so any buyer would have to offer similar terms to minority shareholders. The board is willing to consider proposals from any new party for either the company or its assets.
The board believes that given additional time it might be possible to deliver greater value to shareholders than has been offered to date, and it is talking to DKR Oasis to see if it “would be prepared to exit its investment over a longer time frame”.
So far this year 178 companies have delisted from Aim, against 293 departures in 2009. The total number of companies on the junior market fell below 1,200 at the end of November, the lowest level since 2004.
http://www.ft.com/cms/s/0/15a512b6-0d2e-11e0-82ff-00144feabdc0.html#axzz19RwfLEcf
Subscribe to:
Posts (Atom)