Dalata shares climb 5% even as Clayton and Maldron hotels firm says would-be shares buyer ends interest        

John Hennessy, chairman of Dalata, and Pat McCann, chief executive of Dalata. File picture: Maxwells 

Shares in Dalata Hotel Group climbed 5% even as Ireland's largest hotel group and owner of the Clayton and Maldron chains said a would-be purchaser of a significant stake in the company had walked away. 

The brief stock market announcement did not reveal the identity of the European corporate entity other than saying that investment bank JP Morgan had worked as an intermediary to seek out potential shareholders to buy €110m worth of Dalata shares from existing shareholders at between €3.50 and €3.75. However, the purchaser opted not to go ahead for reasons that were not explained. 

The would-be shares buyer which was seeking to buy a stake of up to 14% in Dalata has put the spotlight on the hotel group which has suffered in recent years from Brexit uncertainty and now the Covid-19 crisis. The shares on Friday jumped 5% to €3.54 each, valuing the firm at around €780.7m. The shares have nonetheless slid 24% from a year ago as the pandemic led to the closure of most of its hotels in Britain and Ireland for long periods. 

In 2019, and before the onset of the crisis, Dalata sourced 57% of €430m in annual revenue from its Dublin hotels, around 25% from Britain, and the balance from the rest of Ireland. However, it posted a net loss of around €63m on revenues of almost €81m in the first six months of 2020.

Dalata raised €94.4m by selling shares in a placing at €2.55 each in September, which along with other measures, including a sale and leaseback of its Clayton Charlemont Hotel in Dublin, was designed to fund it through the crisis. Chief executive Pat McCann owned around 0.75% of the company after the shares sale. 

Goodbody analyst Paul Ruddy said that the news was "supportive of valuation" despite the buyer being unsuccessful, helped also "because it would appear that sufficient existing shareholders were unwilling to sell at those levels".