An outfit created by Norwegian Property, the original suitor of Norgani, has moved into pole position to buy the chain with a NOK91 per share bid.
This trumps the NOK88.50 bid by Aberdeen Property Investors and is markedly ahead of the NOK82.50 that Norwegian originally bid.
But the real intrigue lies with how the Norwegian vehicle, Oslo Properties, has made the move make sense. Scandic, which contributes about 60% of Norgani’s rental income, has agreed to increase its rents.
The shareholders of Oslo Properties include Scandic’s backer, the private equity house EQT, as well as Norwegian Property, the company headed by former SAS executive Petter Jansen.
Aberdeen had itself linked to a rival hotel owner for its bid. It had agreed to sell six hotels to Home Properties, the Oslo-listed chain controlled by Petter Stordalen. Home has hotels operated by Scandic and Choice Hotels Scandinavia, the latter a company also chaired by Stordalen.
The bidding war may yet have further to run. Credit Suisse has bought 5% of Norgani’s shares and the share price of Norgani has risen above the latest offer price.
Aberdeen said it would consider raising its offer, particularly given the deal with Scandic which had “changed the deal economics”.
The Norwegian presentation on its bid described Scandic as the “unrivalled Nordic market leader” with an 18.5% share, with the next nearest being Rica with 9.4%, Radisson SAS with 8.9% and Quality with 8.4%. Scandic is 58% of Norgani’s room count with Choice being the next biggest at 21%.
Driving the interest in Norgani is the strong growth in the Nordic market: in the year to July 2007, revpar in Norway is up 13% and up 10% in both Sweden and Finland.