Nippon Hotel, Japan Hotel REITs to Merge in $224 Million Deal

Nippon Hotel Fund Investment Corp. (8985), a real estate investment trust, will merge with Japan Hotel & Resort Inc. to expand asset size and boost share performance, the companies said in a statement.

Nippon Hotel will split its shares into 12 and sell 1.16 million of new shares to pay for the acquisition, according to the joint statement. The transaction is valued at 17.5 billion yen ($224 million) based on yesterday’s closing price of Nippon Hotel, according to data compiled by Bloomberg. Japan Hotel will be delisted by March 28, according the statement.

The merger will be effective as of April 1, the trusts said in the statement. The manager of both REITs also will merge on April 1, the companies said.

Nippon Hotel, whose shares declined 30 percent this year, rose 2.2 percent, while Japan Hotel fell 4.6 percent at the close of trading in Tokyo today. Japan Hotel dropped 40 percent in 2011.

To contact the reporters on this story: Kathleen Chu in Tokyo at kchu2@bloomberg.net; Ueno Eijiro in Tokyo at e.ueno@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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