Elegant Hotels Share Discussion Threads

[lbo] 04/12/2017 16:12

If they cut the dividend which was just covered by earnings then they would probably be able to reinvest more in upgrading the properties. The poor offering would explain why other competitors on the island like Sandals has consistently higher occupancy rates and why Elegant has been suffering falling occupancy rates since its IPO even though UK visitors to the island were up. This along with increase competition from the likes of Airbnb and Villa rentals may be more to do with the recent profit warnings rather then Zika and weak sterling.

Also interesting to see what sanctions are put on Barbados as a blacklist tax haven.

[shauney2] 04/12/2017 16:07

Which hotel was it samdb?

From Shares Magazine

"Who will be next to make a takeover offer for Elegant Hotels?

[samdb] 04/12/2017 15:42

Couldn't even get a sunbed on one of the days, not good for £500/night. Good for the company though as they were at capacity (they told me as much).

[samdb] 04/12/2017 15:40

Stayed in one of their hotels last week, pretty underwhelmed. I'd go so far as to say it should have been about half the price or less.Still going to look at the investment case though in case Liberum are correct.

[lbo] 04/12/2017 13:33

Perhaps we should filter you?salchow - 15 Jun 2016 - 09:10:26 - 75 of 663Profit warnings coming in 3's is a myth. They can also come in 1's and 2's and sometimes they even keep coming until the company is bust.

[lbo] 04/12/2017 11:13

We have all come across them on AIM.

[lbo] 04/12/2017 10:51

We should all be sceptical when it comes to AIM and believing what you read in the papers!

[lbo] 04/12/2017 10:30

It's nothing we have not seen on AIM before!





On Tuesday the AIM-listed company confirmed its postage stamp investment business had gone into administration, leaving hundreds of investors who bought rare stamps with the promise of a “buyback guarantee” in limbo.

The Guernsey-based subsidiary is in possession of £12.6mln worth of rare stamps but has about £54mln of liabilities relating to the buyback guarantees, plus a further £11mln in undefined liabilities and another £6.5mln which it owes to the parent company.

The scheme – which guaranteed customers at least 75% of the book value of their stamps at the end of a given period – was stopped last year amid concerns about just how safe the guarantees were.

With Stanley Gibbons revealing last month that it was in default on its bank facilities, investors will be hoping this isn’t the sign of things to come. Shares took a licking, down 33.6% to 4.62p.

[stemis] 04/12/2017 10:27

Anyone who thinks LBO doesn't have a grudge against the company only has to read his contortions over the last couple of days. Everything is negative; the absence of a bid, then a bid, and then a rejected bid. If Elegant buy a hotel for a higher per room valuation than their current hotels, they've overpaid. If it's less, it means the value of their existing hotels has fallen. If the pound rises it's bad, if it falls it's bad.

Company's don't approach others (at least not unless they are in financial trouble) offering to buy them at below their share price. Liberium is EHG's joint broker. Probably got a bit more inside knowledge/credibility than anonymous posters on Advfn. It's pretty clear that Melia took advantage of a low point in EHG's fortunes to make an opportunistic approach. They want it all not just a share holding so not going to be picking up minority holdings in the market. EHG, who despite LBO's previous claims, are not in financial trouble, wanted a full price. Result, no agreement.

[lbo] 04/12/2017 10:02

I would have thought the lower book value of the properties as reported by the company itself would have been the most prudent valuation not that of the house broker relying on an outdated CBRE valuation before occupancy rates and EBITDA started falling and the profit warnings.Also as mentioned before if anything the recent acquisition valuations lower the overall NAV when applied to the other Elegant properties which still have not all been refurbished. They confirm asset prices are still falling in Barbados. The $10.5m Treasure Beach deal equates to $300,000 per refurbished room when divided by 35 while Waves was bought for $18m plus the $4m Cap Ex so which when divided by the 70 rooms put a value of $315,000 per room.Using these post refurbishment valuations ($300,000 X 588 rooms), the Group's properties INCLUDING Treasure Beach, would be valued at ONLY $176.4million not $257m excluding treasure beach as per the half year report which again references an old CBRE valuation as at 15 April 2015 (over 2 years old and based on higher asset values at the time and higher occupancy, RevPar and cashflows back then). There has been multiple profit warnings and reduced earnings per share since 2015) Also not all the groups properties have been refurbished so this would still be an optimistic valuation applying it across all the properties. But still based on net debt of $62 million at 31 March 2017 (debt should be $8m higher after Treasure beach acquisition closed May 2017), this would equate to an implied net asset value (NAV) of less then $114.4 million not $195m as reported (ie less then $1.2848c per share or less then £0.97p per share, based on today's exchange rate)Also perhaps sometimes actions speak louder then words and neither Luke himself nor Melia seem to be willing to fully takeover this company which is supposedly so cheap. https://www.thetimes.co.uk/article/luke-johnson-you-can-build-an-empire-on-words-just-ask-donald-trump-7hwgdc6fsI just hope this whole Melia story being leaked is not some sort of ruse ahead of the dividend being cut and some other bad news around the corner.

[jeff h] 04/12/2017 09:01

LIBERUM: Elegant Hotels* - Bid approach indicates just how under-valued the group is
2017-12-04 07:50:26.261 GMT

Abstract:
The proposed bid that was reported in the press this weekend was at a rumoured
£100m. On our calculations this puts the offer at a discount to NAV and our NAV
is very prudent indeed.

[lbo] 04/12/2017 07:45

At least it's a nice distraction from the Barbados economic problems, an election and probably IMF intervention/devaluation.

[che7win] 04/12/2017 07:32

Plus sterling is appreciating, all good news.

[lbo] 04/12/2017 07:30

Not so sure. Seems they have connections going back years ago. Why did they not buy the shares off Vision Capital when they sold out recently? The way the story was leaked to the press and now confirmation that talks were terminated with no offer is all very suspect to say the least.

[che7win] 04/12/2017 07:12

Takeover talks confirmed, regardless of the outcome, shows EHG is undervalued to be attracting interest.

[lbo] 04/12/2017 07:08

Talks terminated and they do not intend to make any offer. Very disappointing to say the least.

[nw99] 02/12/2017 17:24

Great News

[lbo] 02/12/2017 16:24

Shame on you! What bid? There is just another story about a bid but nothing confirmed yet from the company. This is the third time takeover rumours have been printed in various articles the last year. When it comes to the AIM market everyone should be sceptical until the cash is in the bank.



Hopefully it's true and not just another dodgy AIM rumour ahead of some bad news down the road. The AIM market is notorious for that kind of ramping in a desperate attempt to get volumes up so people can try to sell out ahead of some bad news. And if it is indeed a real approach and still proceeds after they carry out full diligence and nothing nasty turns up then will it be paid for by all equity or all cash or part cash and part equity.

[che7win] 02/12/2017 15:04

LBO,
Shame on you for continually deramping this, the bid shows you have been wrong.

[lbo] 02/12/2017 13:32

in most cases rumors fail to materialize into public announcements.

[lbo] 02/12/2017 09:48

If an AIM quoted company is incorporated in the UK, Channel Islands or Isle of Man, the UK Takeover Code will apply if the company is considered by the Panel to be 'centrally managed and controlled' in the UK, Channel Islands or Isle of Man. In assessing the place of central management and control, the Panel will predominantly focus on the residency of board members. Changes in board composition can therefore affect an AIM company's UK Takeover Code status, and historic statements (such as any statements made in its Admission Document or previous announcements to the market) cannot be relied on as an accurate indication of the current position (see, for example, Cape Diamonds Plc). This means that the application of the UK Takeover Code can be particularly problematic in relation to the significant number of AIM companies that, although incorporated in the UK, Channel Islands or Isle of Man, are centrally managed and controlled elsewhere. The UK Takeover Code will not apply to AIM quoted companies which are incorporated outside the UK, Channel Islands and Isle of Man, although there may be other local takeover regulations which apply in their jurisdiction of incorporation or other jurisdictions in which their shares are traded, and this should always be checked.

[shauney2] 02/12/2017 08:45

Thanks for posting Jeff.At 120p thats a forward PER of 12/13.Looks cheap with all the property assets to back it up.

[lbo] 02/12/2017 08:31

An takeover story now being leaked from the same newspaper that Luke Johnson writes for!? Might raise a few eyebrows!

[lbo] 02/12/2017 08:21

LBO - 07 Apr 2017 - 11:58 - 533 of 641 - 0

But it's ok to try and ramp! Maybe some insiders posting on here are nervous if the company will be able to get a discounted equity fundraising away if they don't pump it up near to the IPO price



There's been some trader-ish noise around Elegant Hotels in recent weeks that it might plausibly be a bid target ..... But I note this with extreme health warnings in place