LVMH Deal Gives Belmond ‘Very Favorable’ Result, Barclays Says

(Bloomberg) -- Shareholders of Belmond Ltd., which owns properties ranging from New York’s ‘21’ Club to the Grand Hotel Europe in St. Petersburg, Russia, are getting a “very favorable” result from LVMH’s buyout, Barclays analyst Anthony Powell writes in a note.

The $25 takeout price “well exceeds” Barclays’s prior real estate value of $18/share for the company, Powell said. LVMH is paying a 42 percent premium to Thursday’s close and 124 percent to its Aug. 8 price, before Belmond announced it was reviewing strategic alternatives.

Belmond appears to be a “one-off” situation given its unique business mix and there’s not likely going to be a trend of non-lodging companies entering the space, according to Barclays, which has an underweight rating on the stock. High valuation achieved by Belmond and competitiveness of sale price suggests there’s still significant buyer interest in the sector.

Belmond’s $25 price, equal to 22 times Jefferies’s Ebitda estimate for this year and 18.5 times for 2019, is not “excessive,” given the quality of the assets, Jefferies analyst David Katz writes in another note.

Shares of Belmond have rallied 40 percent, the most intraday since Aug. 9, when they jumped 45 percent.

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