Belmond Ltd. announced that it is reviewing its “strategic alternatives to enhance shareholder value” – including a sale of the luxury hospitality company.
Hamilton, Bermuda-based Belmond, formerly Orient Express, owns or part-owns 46 hotel, restaurant, train and river cruise properties operating in 24 countries.
“The board is committed to pursuing a path that is in the best interests of all Belmond shareholders. Accordingly, we are conducting a robust review of the full range of strategic, operational and financial alternatives available to the Company, including a possible sale,” Chairman Roland Hernandez said in a statement.
“We have made meaningful progress toward our long-term strategic goals, including growing earnings, increasing brand awareness, and expanding our global footprint,” he said. “We believe that now is the right time to conduct a strategic review process in order to enhance value for shareholders, given Belmond’s truly exceptional and unique collection of iconic owned properties and strong fundamentals in our markets around the world.”
The board engaged Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC as financial advisers and Weil Gotshal & Manges LLP as legal adviser.
Pointing to challenges to a sale, Jefferies analyst David Katz told the Wall Street Journal, “I think the fundamental issue is these are exquisite assets, but if you look across the hotel space, scale is what’s prevailing these days.”
The company also released its 2Q 2018 financials: Revenue was US$171.6 million, a US$5.7 million increase in the year-over-year period. In constant currency, revenue decreased by US$1.3 million, due to closures of Caribbean hotels and of the 21 Club in New York but offset by YOY increases at Venice Simplon-Orient-Express. Same-store RevPAR for owned hotels increased 5% YOY, but flat on a constant currency basis; and adjusted EBITDA was US$51.4 million, up 11% YOY.