Narrative
Full Description
Project narrative
On April 27, 2016, HNA Tourism Group Co., Ltd. — a Chinese hospitality company and a division of HNA Group Co., Limited, a Chinese conglomerate headquartered in Haikou, Hainan — announced that it had entered an agreement with Carlson Hospitality Group, Inc. to acquire a 100% stake in Carlson Hotels, Inc.. China CITIC Bank Corporation Inc. issued a loan to support HNA Tourism's acquisition of Carlson Hotels, Inc.. Carlson Hotels, Inc. was an United States-based hotel holding company headquartered in Minnetonka, Minnesota with over 1,400 hotels in operation or under development, 220,000 rooms, and spanning 115 countries and territories. Its portfolio included the global brands Quorvus Collection, Radisson Blu, Radisson, Radisson RED, Park Plaza, Park Inn by Radisson, Country Inns & Suites By CarlsonSM, and Club CarlsonSM, the global hotel rewards program. Carlson Hotels also held 51.3% ownership stake in Rezidor Hotel Group AB (publ), a hotel company based in Brussels, Belgium, but listed on the Stockholm Stock Exchange, which was Carlson Hotel's master licensee for its brands in Europe, Middle East, and Africa. Carlson Hotels and its brands had over 90,000 people employees. While the purchase price was unknown, it was expected by analysts that Carlson Hotels would be worth some $2 billion USD. The acquisition included all of Carlson Hotels, including the 51.3% stake in Rezidor; because the acquisition would result in an indirect change of control in Rezidor, HNA Tourism Group would, under Swedish takeover rules, be obliged to launch a mandatory public tender offer based on the minimum price in such mandatory tender offer would be the 20-trading day volume weighted average price (VWAP) for the remaining 48.7% of Rezidor, within four weeks after the closing of the acquisition if the ownership in Rezidor was not sold down below 30%. HNA Tourism pledged to maintain Minnetonka, Minnesota, as the headquarters and keep David P. Berg, the chief executive officer of Carlson Hospitality Group Inc. as CEO of Carlson Hotels, Inc.. The acquisition was expected to allow HNA Tourism to build on the Radisson brand to help establish its presence in the U.S. market and expand internationally. Due to the pending acquisition, NH Hotels, a Madrid, Spain-based hotel company owned by HNA, had its chief executive officer and four of its board members ousted from the company over concerns that the acquisition of Carlson Hotels would be a major conflict of interest due to the stake in Rezidor. The Carlson board of directors unanimously supported the acquisition. The acquisition was expected to close in the second half of 2016. The acquisition was completed on December 7, 2016. The acquisition triggered the mandatory tender offer for the outstanding shares in Rezidor. On December 22, 2016, HNA Tourism Group, through its wholly-owned subsidiary HNA Sweden Hospitality Management AB, announced a mandatory cash tender offer to the shareholders of Rezidor to acquire all outstanding shares (48.7%) in Rezidor kr34.86 SEK in cash per share in Rezidor. Rezidor's board of directors unanimously recommended that shareholders not to accept the offer because it did not consider the offer as properly valuing Rezidor financially. By the start of April 2017, shareholders with 19.1% of the shares of Rezidor had accepted the offer. However, by August 2017, nothing had happened, with the acquisition of those shares pushed to the end of September 2017 with a possible further delay to November 2017 because of delays in getting the regulatory approvals to take the money out of China, as the Chinese Government had increased scrutiny of companies, including HNA, using funds to acquire overseas assets. The acquisition of the further 19.1% stake, giving HNA Tourism 70.3% in Rezidor, was completed in October 2017. Carlson Hotels, Inc. was renamed Radisson Hospitality, Inc. and Rezidor Hotel Group AB was renamed Radisson Hospitality AB. On August 9, 2018, Aplite Holdings AB — a Sweden-incorporated special purpose acquisition vehicle jointly owned by Jin Jiang International Holdings Co., Ltd., a Chinese state-owned hospitality and travel company that develops and manages hotels and is headquartered in Shanghai, China, and SINO-CEE Fund, a Luxembourg-incorporated Chinese private equity fund (minority shareholder) — entered into an agreement with Radisson Hospitality, Inc. — a hotel holding company, formerly known as Carlson Hotels, Inc. — and HNA Sweden Hospitality Management AB to purchase a 100% equity stake in Radisson Holdings, Inc. — owner of Radisson Hospitality — for an unknown consideration and its owned 51.15% owned stake in Radisson Hospitality AB (publ) for kr35.00 SEK ($3.82 USD; €3.37 EUR) per share, or kr3 billion SEK ($339.3 million USD) if all shares were purchased as well as HNA Sweden's 18.5% stake in Radisson Hospitality AB. Aplite would acquire the shares in Radisson Hospitality AB (formerly Rezidor Hotel Group AB) from Radisson Hospitality, Inc. and HNA Sweden and then thereafter acquire 100% of Radisson Holdings, Inc.. HNA sold Radisson as part of a wider pattern of selling assets to lower its debt levels, one of the highest in all of China. The entire sale was expected to cost at least $2 billion USD. The acquisition was completed on November 13, 2018, with Aplite Holdings AB acquiring 87,552,187 shares in Radisson Hospitality AB from Radisson Hospitality Inc., or 50.21% of the shares and votes in Radisson Hospitality AB. As a result of the acquisition, per Chapter 3, Section 1 of the Swedish Public Takeover Act, Aplite Holdings AB was obligated to either launch a mandatory tender offer for the remaining outstanding shares in Radisson AB or sell down its ownership in Radisson AB below 30% within four weeks from the completion of the acquisition. Radisson AB's independent committee did not positively recommend the offer to the shareholders. As of February 5, 2019, Aplite Holdings announced that it had acquired 164,143,028 shares of Radisson, some 94.12% of the shares and votes. It then moved to privatize Radisson, with its stock delisted from the Nasdaq Stockholm on March 22, 2019. Circa March 2019, the Industrial and Commercial Bank of China (ICBC) entered into a €846 million EUR ($935 million USD) dual-tranche acquisition bridge loan agreement with Aplite Holdings AB to finance its acquisition of Radisson Hospitality, Inc. This loan was divided into a €250,000,000 EUR tranche and €596,000,000 EUR tranche. Record ID#107804 captures the €250 million EUR tranche. Record ID#107810 captures the €596 million EUR tranche.
Staff comments
1. The specific borrowing institution of the China CITIC Bank loan is unknown; for the time being, AidData has coded the ultimate beneficiary HNA Tourism as the receiving agency. 2. The specific commitment date of the China CITIC Bank loan is unknown; for the time being, AidData has coded the completion date of the acquisition (December 7, 2016) as the commitment date of the loan. 3. The face value of the China CITIC Bank Corporation loan is unknown. However, given that the total cost of the acquisition was approximately $2 billion USD and China CITIC Bank Corporation M&A loans often cover at least 70% of the total cost of the acquisition, AidData assumes for the time being that the face value of the China CITIC Bank Corporation loan was roughly equivalent to $1.4 billion USD. This issue warrants further investigation.