Norwegian Property, Aberdeen wrestle for Norgani

Oslo-based Norwegian Properties has increased its offer for Norgani Hotels to NOK 91 (EUR 11.60) per share, valuing the fifth largest hotel owner in Europe at EUR 462 mln. The enhanced offer for the Oslo-based hotel company is being tabled through single-purpose vehicle Oslo Properties. The new bid represents a premium of NOK 2.50 on the offer made by Aberdeen Property Investors last week.

Last week, Norwegian appeared to throw in the towel in the face of Aberdeen's bid as it trumped Norwegian’s initial offer. 'We considered the possibility of an increased offer, however after thorough consideration by our board, we decided not to proceed further with that option,' Petter Jansen, CEO of Norwegian Property said at the time.

But Norwegian came out fighting on Monday and announced it had invested NOK 350 mln in to secure an 18% stake in Oslo Properties and has the right to acquire 90%. On 14 September Oslo Properties announced it held 13% of Norgani and was bidding for the rest.

Hotel group Scandic/EQT, Norgani's main tenant, has a 53% stake in Oslo Properties. Norwegian has undertaken to guarantee all debt relating to Oslo's bid for Norgani, while Scandic has agreed new long-term leases.

Back in August over 60% of Norgani's shareholders pre-approved Norwegian's initial NOK 82.5 per share offer. Norwegian Properties said it was on course to achieve the target of 90% backing by early September. What Norwegian presented as a fait accompli was derailed when Aberdeen threw its hat into the ring on 10 September. Norgani’s board of directors issued a statement on the same day in support of Aberdeen's bid.

Aberdeen said the acquisition of Norgani would create the foundation for a new hotel property fund. 'The acquisition of Norgani is a very attractive investment opportunity with a relatively high yield at a relatively low risk. The investment will give our existing funds a faster exposure and create possibilities for new products in our product range,' said Per Samuelsen, director of investments for Aberdeen in Norway.

If the bid succeeds, Norgani's management team would form the core of Aberdeen's new dedicated hotel-team and would 'enable Aberdeen to seek out new investments in the hotel sector both in the Nordic countries and in Europe'.

Aberdeen indicated on Monday that it will extend the offer period and may increase its bid.