(Updates with closing shares price.)
Oct. 17 (Bloomberg) -- NH Hoteles SA, Spain’s largest business hotel chain, said China’s HNA Group Co. Ltd. will pay 24 percent less than previously agreed to take a 20 percent stake in the company, increasing chances of the deal being completed.
Hainan-based HNA will pay 5.35 euros per share for 61.7 million new NH shares compared with 7 euros per share set in May, NH said in a regulatory filing today.
Madrid-based NH Hoteles jumped 48 cents, or 15 percent to 3.74 euros, its biggest gain since May 10, 2010. The shares have lost 36 percent since the deal was announced in May this year.
“Markets were doubting the transaction would take place at all given the slide in the share price since the original offer was made,” said Luis Benguerel, a trader at Interbrokers in Barcelona, Spain. “A more attractive price will ensure the deal will go through.”
The deal will raise 329.85 million euros ($455 million) for NH, compared with 431.6 million euros under the terms of the previous agreement.
HNA, an air-transport and tourism company controlled by the government of Hainan province is acquiring the stake as part of an agreement that will see the companies create a joint venture in China and NH become the preferred hotel for clients traveling with HNA.
The capital increase, which will allow HNA to become the hotelier’s second-biggest shareholder behind Grupo Inversor Hesperia SA, will have to be exercised before Dec. 15, according to the statement.
NH Hoteles has 400 hotels in 25 countries. About a quarter of the company’s second-quarter revenue came from Spain, which is struggling to emerge from the deepest recession in six decades as austerity measures undermine the recovery.
Spanish Prime Minister Jose Luis Rodriguez Zapatero is trying to encourage Chinese investment in Spain and Spanish companies to boost exports to the Asian nation and visited China in April to improve ties between the countries.
HNA Group had revenue of 7 billion euros in 2010. The group’s assets included Hainan Airlines and department store Xi’an Minsheng Group worth 40 billion euros, according to a NH press release in May.
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