Mandarin Oriental share price soars +30% on news of Excelsior proposal
Mandarin Oriental International Ltd., an international hotel investment and management group, has seen its share price appreciate dramatically over the past nine months. These gains have largely been driven by investors’ speculation over the value of the company’s real estate, much of which it is in the process of divesting as it pursues an “asset-light” strategy similar to that of other big names in the space, like Marriott. Now, news that prospective buyers have made “at least five bids” on the Excelsior hotel in Hong Kong has sent the company’s share price up yet again, this time by an incredible 30%. The bids value the property at $3.8 billion.
Mandarin Oriental’s share price is up by an astounding 118% so far this year
Source: Yahoo Finance
The Hong Kong Economic Journal reported the bids on Saturday, claiming that bidders included a “Chinese-backed consortium of Sun Hung Kai Properties Ltd. and Hysan Development Co.” – neither party has responded to requests for comment. Mandarin Oriental, however, confirmed the existence of offers, but has not yet made a decision over the sale. It said the proposals form a basis for “further consideration of the company’s strategic options.”
The Excelsior is an iconic Hong Kong landmark, and a prime piece of real estate. It is also Mandarin’s only non-five star hotel, holding a four star rank. The company operates 30 hotels and 8 residences in 20 countries and regions, and has more in the pipeline. Mandarin has been toying with the idea of selling the Excelsior for months, though it reiterates that no assumption should be made regarding whether the property will or will not be sold.
Dominion holds Mandarin Oriental in its Global Trends Luxury Fund.
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