Hamilton City Council has confirmed the sale of its 41.38% shareholding in Hamilton Riverview Hotel Ltd to Tainui Development Ltd, a subsidiary of Tainui Group Holdings Ltd.
The settlement terms include an agreed price of $12 million for Council’s 41.38% equity.
Tainui Development Ltd previously held 41.38% equity, so the sale means that this now increases to 82.76%. The remaining 17.24% is held by AAPC NZ Pty Limited (part of the Accor group) who also manage the Novotel Tainui Hotel and Ibis Hotel Tainui.
The sale of shares takes place today, Wednesday 16 October.
The 2012-22 10-Year Plan outlined Hamilton City Council’s intention to sell its shareholding in the Hamilton Riverview Hotel. The Council resolved on the 4 July 2013 to sell the shares at a fair market value in line with independent valuations.
For Council’s Chief Executive Barry Harris, the sale of the shares is a great outcome and is in line with Council’s long term financial strategy and continuous drive to reduce debt.
“We were only going to sell these shares if we could settle on a price that represented “fair value”. The $12 million settlement is in line with our independent valuations so this is a great result for Council and it is now an appropriate time for Council to now exit its shareholding. “
Tainui Group Holdings Ltd Chief Executive Mike Pohio commented that the purchase represents another positive step in the evolution of the commercial arm of Waikato-Tainui.
Accor Vice President, Garth Simmons said “The two hotels have enjoyed significant success since their respective openings. We remain committed to supporting tourism to the Waikato region and furthering our close partnership with Tainui Group Holdings Ltd.”
The Council has held an interest in Hamilton Riverview Hotel Ltd since 1997 when it invested $6 million for its 41.38% shareholding with the Novotel Tainui Hotel constructed in 1999 and Ibis Hotel Tainui constructed in 2007.