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Hong Kong-based conglomerate Jardine Matheson recently announced that it would acquire the remaining shares of Mandarin Oriental that it does not already own, valuing the luxury hotel and management firm at about USD 4.2 billion. The 193-year-old group stated that full ownership would enable it to enhance Mandarin Oriental's growth and streamline its portfolio. The deal coincides with Mandarin Oriental's agreement to sell the top floors of its One Causeway Bay tower in Hong Kong to Alibaba Group and Ant Group for USD 925 million.
Jardine Matheson, one of Hong Kong's oldest conglomerates with business interests in property, retail and automotive sectors, announced earlier this week that its unit would acquire the remaining shares of Mandarin Oriental it does not already own. The transaction values the luxury hotel investment and management firm at approximately USD 4.2 billion. According to the company's statement, the move towards full ownership would help it provide better support for Mandarin Oriental's long-term growth while simplifying its overall portfolio. Advertisement
Mandarin Oriental currently manages 43 hotels, 12 residences and 26 luxury homes across 27 countries and territories, including major destinations such as Hong Kong and New York. The announcement coincided with Mandarin Oriental's agreement to sell the top 13 floors of its flagship One Causeway Bay tower in Hong Kong to Alibaba Group and Chinese fintech major Ant Group for USD 925 million. Both entities were founded by Chinese billionaire Jack Ma. The One Causeway Bay property is a premium mixed-use development located in one of the city's most sought-after business and retail districts.
The offer for the remaining 11.96% stake is priced at USD 3.35 per share, which includes USD 2.75 in cash and a special dividend of USD 0.60 per share. The dividend is to be funded through proceeds from the Hong Kong property sale. Jardine Matheson stated that the acquisition would be financed through existing cash reserves and committed facilities. The total offer represents a 52% premium over Mandarin Oriental's last unaffected share price of USD 2.20, recorded the day before the company disclosed its plans to sell part of its stake in the One Causeway Bay property.
Jardine Matheson also mentioned that the buyout through its unit, Jardine Strategic, would eventually lead to Mandarin Oriental's delisting from the Singapore stock exchange. As per market data, Mandarin Oriental shares have risen by 37.9% so far this year, while Jardine Matheson's stock has increased by 49.2%. The completion of the property sale, anticipated by the end of this year, remains a key condition for the acquisition, which Jardine Matheson expects to conclude by early 2026.
Jardine Matheson's move to fully acquire Mandarin Oriental underscores its intent to consolidate its hospitality portfolio and streamline ownership across group companies. The decision follows Mandarin Oriental's significant asset sale in Hong Kong, which will help fund the transaction. With strong market performance from both firms and a substantial premium offered to shareholders, the buyout positions Jardine Matheson to exercise greater strategic control over one of the world's leading luxury hotel brands, aligning with its broader long-term investment objectives.
Source - Reuters
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