NH Hotel Group reshuffle amid minority investor tensions

NH Hotel Group undergoes board reshuffle amid minority investor tensions

The NH Hotel Group board agreed to put the matter up for consideration at its upcoming meeting after the dismissal of the former chair, Alfredo Fernández Agras, following a loss of trust. Dillip Rajakarier from the Minor group, along with the current chief executive, Ramón Aragonés, were named to lead the group in new chair and vice-chair capacities, respectively, according to notifications to the market regulator.

The hotel company convened its board urgently after the unexpected resignation of three independent directors who disagreed with recent actions by the majority partner Minor. One of the resigning directors had served as council chair, Alfredo Fernández Agras.

The board also approved initiating a search for new independent directors to join immediately, announcing plans to engage a specialized headhunting firm to obtain input.

The board believes the three resigning directors acted in a disloyal manner during the process to consider a potential dismissal and reportedly interfered with the board review process, as reflected in an independent expert report obtained by the market regulator.

The company asserts that the conduct of the resigning managers harmed NH Hotel Group and its public image, noting that the statements in their resignation letters were incomplete and biased. The board contends that the company must safeguard ongoing transactions from being affected by the actions of independent directors.

At yesterday’s council meeting, held at the request of other members, the board addressed the resignation letter and Neutral positions regarding Minor’s plan to acquire NH shares within a 30-day window at a price not exceeding a specified threshold, raising concerns about implications for minority shareholders.

Minor’s attempted takeover approach, including the price level proposed for the acquisition of the approximately 6 percent stake, caused division within the Spanish business group’s leadership.

The NH hotel group president, along with Alfredo Fernández Agras, José María Cantero de Montes-Jovellar and Fernando Lacadena Azpeitia, independent executives, announced their irrevocable decision to resign from the governing body amid disputes over actions by Minor.

The directors stated that the board had previously approved a €7.30 per-share delisting proposal, which was suspended due to market conditions, and they suggested that the current offer would be higher than that previously considered.

The executives argued that the business outlook remained strong and believed Minor’s offer could lead to a further tightening of NH liquidity, potentially harming minority shareholders.

The company subsequently informed the market regulator that the resignations would take effect at the upcoming ordinary shareholders meeting, scheduled for the next year.

In their resignation letters, the three executives argued that Minor’s stance against supporting a public delisting proposal at a CNMV-acceptable price would negatively affect minority shareholders.

Faced with these developments, the remaining board members convened an urgent meeting to review the statements and provide an official response as soon as possible.

In addition to the three independent directors, nine other individuals tied to Minor hold seats on the NH board, including the chief executive of the group, another executive, and several representatives from Minor. The full board alignment reflected a complex blend of interests within the organization.

Source of conflict

The tension surfaced when Minor, which controls a large majority of NH’s capital, announced its intention to buy NH shares for a period of 30 days at an agreed maximum price, signaling that no further purchases would occur after that window. The move prompted a trading halt by the market regulator and sparked questions about market signaling and fairness to minority holders.

In subsequent discussions, Minor clarified that its acquisitions would occur at market prices and rejected characterizations of a formal takeover bid. It stressed that the purchases should not be interpreted as a bid in the regulatory sense.

The market authority warned that any attempt to buy a large block of shares at a fixed price could be perceived as a takeover attempt and would require appropriate regulatory review.

The crisis intensified when the independent directors collectively resigned, citing disagreements with Minor. They emphasized that the decision to depart would take effect at the next shareholders meeting, and they refused to sell the substantial shareholding they personally owned.

Minor maintained that its share purchases were intended to improve liquidity for NH, while taking care to avoid triggering a formal takeover process under the applicable rules.

The unfolding events illustrated a sharp clash of vision between the majority investor and the NH management and board, with ongoing uncertainty about the path forward for the hotel group and the interests of its minority shareholders. Market observers note that the situation remains fluid, with the next shareholders meeting poised to shape the company’s strategic direction.