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HI AND IHGH MAJORITY SHAREHOLDERS REACH CONDITIONAL AGREEMENT

16/01/2015

International Hotel Investments p.l.c. (IHI) and Island Hotels Group Holdings p.l.c. (IHGH), announce that following discussions in recent weeks with a significant majority of IHGH shareholders, a conditional agreement has been signed with the objective of merging the assets and operations of IHGH within those of IHI through the acquisition by IHI of IHGH.

IHGH believes that an acquisition of its assets, management expertise and businesses by IHI represents an opportunity for IHGH shareholders to crystallise their investment at a fair price while continuing to form part of the future success of IHI.

Concurrently, IHI believes that this acquisition will contribute significant synergies, gains and benefits. These include operational synergies across the board and additional development opportunities that will arise as a result of an amalgamation of IHGH’s hotel operation in St George’s Bay with that of IHI’s own neighbouring hotels. Both companies are also actively involved in the catering sector, in Malta and overseas. The combined experiences will create efficiencies in existing operations all round, and provide a stronger platform for international growth.

The agreement is subject to the satisfaction of various conditions over the coming months, including but not limited to, compliance with regulatory requirements and obtaining shareholders’ approvals, as and where necessary, as well as, among other terms and conditions, conducting a satisfactory due diligence on IHGH. Based on publicly available information and IHI’s analysis, IHI has indicated a tentative Enterprise Value of € 106.5 million and a tentative Net Equity Value of IHGH of €50 million.  Based on the completion of a satisfactory due diligence, and the indicative value confirmed, IHI has indicated that it would proceed with a voluntary offer for all the shares of IHGH in which the price for IHGH shares would be paid as to €1 in cash, split into two tranches, the first tranche of €0.55c payable on completion and the second tranche payable 12 months later.  In addition to this cash component IHGH shareholders will also receive 0.246 IHI shares for each IHG share held through the issue of 9 million shares by IHI.

It is expected that, in due course, IHI and IHGH will make a further announcements confirming the terms and conditions upon which IHI shall proceed to make a voluntary offer for all the shares in IHGH in the event that all conditions are ultimately satisfied.

As part of the conditional agreement the management of IHGH will remain unchanged and will continue to operate all IHGH businesses as normal. The agreement also anticipates that the current jobs within the respective companies will be safeguarded.