Ratos exits Scandic for E185.7m

Hilton buys Ratos’s stake for cash and shares.

Swedish investment house Ratos has sold the majority of its 25.1 per cent stake in Scandic Hotels to Hilton Group for E185.7m in cash. Ratos will also receive new Hilton shares as part of the deal.

The deal was part of a wider offer for the whole of Scandic worth E982m.

Hilton will pay Ratos E15.7 per share for 15,460,370 Scandic shares held by Ratos, worth E240m. Ratos will receive 75 per cent in cash, worth E185.7m, and the rest in newly issued Hilton shares.

The offer represents a 30 per cent premium to Scandic’s share price of E12.0 on April 20 and a multiple of 10.9 times Scandic’s earnings in 2000.

Ratos has said it will retain its shares in Hilton Group for a year. It also retains 225,594 Scandic shares, which it plans to sell later.

Scandic is the region's largest hotel chain. It’s 154 hotels will double Hilton’s presence, making it the largest four-and five-star hotel operator in northern Europe.

Ratos invested in Scandic in 1983. In 1996 the company went public on the Stockholm exchange.

Ratos, which holds investments worth SEK9bn, is also expected to acquire Swedish private equity firm Atle and its subsidiary Gadelius, a Japanese trading house. Ratos will make the acquisition through Woodrose Invest, a company it jointly owns with 3i.

Hilton shares stand at 218.5p.