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Japan Leisure Hotels

  • BY: Andrew Hore |
  • POSTED: 20/12/2010 |

Japan Leisure Hotels, which rents rooms by the hour, says that its 87.6% shareholder DKR Oasis Management Company wants to exit its investment which could lead to a bid for the company or a liquidation of its assets.

The board warns that a bid is unlikely to be higher than the current share price – 27.5p down 3p on the day – and it could even be at a discount to that price.

The liquidation of assets would require shareholder approval at a general meeting but that is a foregone conclusion. Any disposal could be at a substantial discount to book value. The underlying net asset value was 77p a share at the end of June 2010. A liquidation could still yield more than a bid, though, even if the assets are sold at well below book value.

The company’s board says it might be able to achieve a better price if the assets were sold over a longer period of time but this will require the agreement of DKR.

Japan Leisure Hotels is valued at £12.1m. It joined Aim on 16 January 2008 when it raised £3.05m at 50p a share - after expenses the figure was £1.9m. That valued the company at £22.1m.

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