Mandarin Oriental to go private

HONG KONG — Hong Kong-based conglomerate Jardine Matheson said on Friday it would buy the remaining 11.96% shares of Mandarin Oriental through its wholly owned subsidiary Bidco. The $3.35/share deal values the Mandarin Oriental at $4.2 billion and would take the company private.

Jardine Matheson said in a statement that full ownership of Mandarin Oriental will simplify its corporate structure, enable it to better support the hotel group’s growth and streamline its portfolio. The acquisition is also intended to give shareholders a chance to realize full value for their shares.

Mandarin Oriental also concurrently announced an agreement to sell the top 13 floors of its flagship One Causeway Bay office tower in Hong Kong, its rooftop signage and 50 parking spaces to a pair of Hangzhou, China-based companies, Alibaba Group and financial technology company Ant Group, for $925 million. One Causeway Bay is a prime mixed-use property located in one of Hong Kong’s top retail and business districts.

The property sale is expected to be completed by the end of the year.

The $3.35 per share offer includes $2.75 in cash and a special dividend of $0.60 per share funded by the Hong Kong property sale. The transaction will be financed through cash and facilities. That total represents a 52% premium to the stock’s last unaffected price of $2.20 on September 29, the day before Mandarin Oriental disclosed it was considering a possible sale.

The proposal will need to be agreed to by 75% of Mandarin Oriental shareholders. Jardine Matheson said it hopes to close the deal by the end of February.

Mandarin Oriental operates 43 hotels, 12 residences and 26 luxury homes across 27 countries and territories.