• JLH cares too much for money

Love may be all you need, but for Japan Leisure Hotels, it seems that the downturn has lead to a state where its customers have decided they don't care too much for money, money can't buy them love.

Japan Leisure Hotels has announced the proposed sale of its trading subsidiaries to Sanglier for £10.4m, after having announced last year that 87.6% shareholder DKR Oasis Management wished to exit.

However, despite its business being the provision of advantageously-priced rooms for couples crowded out of their houses in space-conscious Japan, there is no love lost between the board and DKR Oasis.

Chairman Alan Clifton said that the board had "considerable misgivings" over the £10.4m price "especially in view of its underlying value as a going concern", with it described as "significantly lower" than the value of the six Bonita Hotels is the group's estate. The underlying net asset value of the company was 77p a share at the end of June 2010, against the minimum payment of 22p a share expected to be returned to shareholders.

However", he added: "DKR Oasis has agreed this transaction and, given their control over 87.57% of the company, the required resolutions will almost certainly be passed".

"We have made every effort to achieve our aim of creating sufficient scale in the Japanese leisure hotel industry to become a market leader. Unfortunately this has not proved possible. Notwithstanding the challenges of the Japanese economy, changes in regulation, a global financial crisis, earthquake and tsunami, the portfolio of Bonita Hotels has continued to generate good cash flows."

The group had planned, three years ago, to expand and drive efficiencies of scale, but admitted that lack of capital had meant that the current business was not large enough to support the central overheads.

DKR Oasis held talks with over 20 potential buyers regarding the sale of the company's shares or assets before agreeing terms with Sanglier. Looking forward, it seems that one of the most likely moves for the group will be its merger with another of Japan's small hotel companies. A potential happy future union.

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