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| Saturday, 20 September 2003 |
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JKH buys Asian Hotels for Rs. 4.1 b by Ravi Ladduwahetty Sri Lanka's premier blue chip corporate leader- John Keells Holdings Ltd yesterday purchased a commanding 60.5 per cent stake of Asian Hotels Ltd, the owning company of the five star Colombo Plaza (formerly Lanka Oberoi) and Trans Asia Hotel amounting to 138 million shares, a transaction worth Rs. 4.1 billion on the floor of the Colombo Stock Exchange. Turnover at the Colombo Stock Exchange also hit an all-time record of Rs 4.9 billion yesterday and the All Share Price Index and the Millanka Price Index, also hit the highest ever since 1994. The ASPI moved up 46.30 points to 1213.97 while the MPI also rose 98.97 points to 2300.77 points This follows the two previous major shareholders of Asian Hotels- David Watt and Tan Sri Azmi selling their controlling stake in AHOT to the John Keells Holdings Group at Rs 30 per share, a 33% premium over yesterday's closing price and a new ten-year high. With the JKH Group believed to have acquired a 60.5 % stake in AHOT, a mandatory offer is expected at Rs 30 per share. AHOT owns the Colombo Plaza hotel and Crescat Developments, while it also has control of Trans Asia Hotels. The JKH share rose Rs 13 on the news of the acquisition to close at Rs 129, while Trans Asia was also actively traded (up Rs 8 to Rs 64 on 750,000 shares) amidst speculation that JKH would look to dispose AHOT's stake at over Rs 70 per share to part-fund the AHOT acquisition. The Daily News Business pages, in its September 17 edition, exclusively published that the shareholders of Asian Hotels were to reap the benefits of a 12-year tax holiday following the management of the company deciding to go in for a share swap with Crescat Developments Ltd for which permission was sought from the Colombo Stock Exchange and the Securities and Exchange Commission (SEC) This acquisition of Asian Hotels is another step in the JKH Group's pursuit of new avenues of growth to generate superior shareholder returns and it offers potential for attractive returns on two fronts, JKH Group Chairman Vivendra Lintotawela told the Daily News yesterday. This acquisition is the first in keeping with JKH's promise to look beyond the line in setting, and working, towards ever higher standards continuously raising the bar of excellence as we strive to give our shareholders returns that exceed the market's and JKH's own targets. He said:" Firstly, as the owing company of the Colombo Plaza and the major shareholder of Trans Asia, AHC avails us the opportunity of reaping the rewards of increasing tourist and business arrivals as the peace dividend takes root and the economy rebounds from two decades of civil war. The excellent relationship networks developed by the Group, in the leisure industry, through its Hotel and Tour Companies and the projected demand to supply relationship of hotel rooms also give us the upside potential in increasing occupancy levels and room rates, within a short time frame." Secondly, Asian Hotels offers attractive Real Estate opportunities. The Crescat City Complex could be developed into the most prime residential and commercial complex in Colombo. The existing boulevard has a foundation for a new tower and there is vacant land for two more. With its connection to a 5 star hotel and an upmarket shopping complex, Crescat provides the scope to exploit the growing apartment culture in Colombo and the demand from overseas based Sri Lankans and expatriates, he said. In addition, the accessibility of the Angsana Spa and Club, run by the Banyan Tree Group, one of the leading Spa operators in the world, to the Complex, gives it added value. JKH recently established a unit to formulate and implement strategies to unlock the latent value of its Real Estate holdings and the acquisition of this prime property gives it more options in this regard.In a separate development at the Colombo bourse, Sri Lanka Telecom was also in favour with investors amidst speculation that it would be acquiring Lanka Bell. The share closed at a new all-time high of Rs 21, with over 6.5 million shares being traded. |
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