Markets Doubt over NH Hoteles-HNA agreement

The crisis in global financial markets these days is hitting stock exchange of all companies, but not at a same level for every case. For instance, NH Hoteles, whose stocks in the Spanish market have lost between May and August 49.7 percent of its value. This decline in just three months means that the market cap of NH has fallen dramatically, from a record high of 1553.6 million euros reached on May 5 to 800 million on 8 August.

What is behind to this remarkable decline? The hotel chain chaired by Mariano Pérez Claver charged in part for failing a strong bill that raised expectations in May, when publicly announced an agreement with the Chinese HNA Group to buy 20 percent of the Spanish company for 432 million.

The news, released on May 5, came to raise the stock price 16.24 percent to a record high of 6.30 euros, most of the semester started in March. In February, the appointment of Pérez Claver replacing Gabriele Burgio triggered a rise of 6.74 percent in one day and the share price remained at 4.74.

However, the effect was not durable. From May 5 through July the company was slowly returning to its previous price, weighted by the crisis and also by the growing rumors that questioned the veracity of the transaction. Far latter is partially confirmed on July 19, when the Spanish company announced that the entry of HNA postponed to next October and admitted having driven deadlines "overly ambitious."

The market response was immediate. The next day the actions of the Spanish hotel group, which took ten weeks down, trading at 4.34 euros, and have since continued to fall to its current level located at 3.19.