NH Hotels CEO Out Amid HNA's Pending Carlson Acquisition
Photo courtesy of NH Hotel Group.
HNA Group's agreement to acquire Carlson Hotels nearly two months ago has resulted in a shake-up within Spanish hotel chain NH Hotels.
Claiming that HNA's pending acquisition constitutes a conflict of interest, since Carlson and NH Hotels compete in a handful of European markets, London-based hedge fund Oceanwood Capital and Grupo Inversor Hesperia SA have ousted NH Hotels CEO Federico Gonzalez Tejera and several HNA-appointed board members.
Boasting a 29.5 percent stake, HNA is NH Hotels' largest investor.
"The overwhelming decision of the shareholders declared the existence of a conflict of interest among HNA Group Co Limited representatives on the board of directors of NH Hotel Group," NH Hotel Group said in a statement Wednesday, one day after approximately 60 percent of shareholders approved the proposal.
The moves prompted HNA to issue an open letter to shareholders Wednesday. In the letter, the Chinese group expressed disappointment and accused Oceanwood of being focused solely on short-term profit.
"Make no mistake, a group of hedge funds that acquired shares in NH Hotel after HNA made its initial investment are seeking to realize short-term profits by trying to force HNA to make a tender offer to acquire the 71.5 percent of NH Hotel’s outstanding shares that it doesn’t already own," HNA stated in the letter. "As NH Hotel’s largest strategic shareholder, HNA has no imminent plans to change the profile of its investment. We will continue to be an active, vigilant shareholder."
"HNA will not be coerced into launching a tender offer to meet the short-term return needs of an ‘event driven’ hedge fund at the expense of NH Hotel, its employees, and other shareholders."
Four new board members have already been nominated.
In Wednesday's statement, NH Hotels said that it "is willing to work with HNA to resolve the conflict of interest created by the Carlson Rezidor transaction and, if appropriate, will look for the mechanism to welcome them back to the board."
In the meantime the search is on for a new CEO and HNA must decide which direction to take following the completion of its Carlson purchase.
More by Patrick Clarke
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