The majority owners of Hungarian chain Danubius Hotels have launched a takeover offer priced at Ft5,825 per share (Eu21).
But analysts at Erste Bank reckon that the actionsof CP Holdings, Israel Tractors and Interag Holding are a technicality forced on them due to their combined 53.4% holding.
CP Holdings said that it would not squeeze out minority shareholders, even if the stake of the combined parties reached 90%. It wants instead to focus on developing and renovating its spa hotels.
Erste Bank agreed that the focus for the majority holders was on using the cash flow from the business to grow, both in Hungary and possibly in the UK where it already has a stake in London’s Regents Park hotel.
It was also considered unlikely that Danabius would follow the trend of splitting property ownership from operating business – a move already completed by Hungarian IT business Graphisoft for example – because of the desire to use cash flow from operations to expand its property portfolio.
Danubius reported a first-half loss of Ft1.77bn (Eu6.4m) on August 12 after a Ft129m (Eu0.47m) profit a year earlier. The blame was placed on unfavourable exchange rates.