Action Hotels gets bid approach from largest shareholder

The offer, of 24p per share, represents a premium of around 50% to the closing share price on Thursday.

"Notwithstanding that there can be no certainty at this stage that the possible offer will be made, the independent directors (excluding John Johnston) intend, having been so advised by WH Ireland Ltd as to the financial terms of the possible offer, to recommend that Action Hotels shareholders accept the possible offer if and when made."

The possible offer is being backed by Action Hotels independent directors Alain Debare and Stefan Allesch-Taylor.

Also on Friday, the company released its results for the year ending 31 December 2017, which showed that the net loss before tax widened to $14.1m from $6.3m the year before, mostly due to the impact of pre-opening financing costs and depreciation of new hotels.

Meanwhile, revenue was up 10% on the year to $58.3m, mainly thanks to the full-year effect of new hotel openings in 2016.

In the first quarter of 2018, total revenue was up around 11% compared to the same period a year ago due to the impact of new hotel openings, while average occupancy increased to 81% from 77% in the first quarter of 2017 and revenue per available room was up 1.8%.

Chief executive officer Alain Debare said "We remain focused on driving performance at our operating hotels and our full year results reflect the solid performance of our mature hotel portfolio, as well as the encouraging success of our newest hotels as they gain traction in their respective markets.

"We have a pipeline of a further two hotels in development, with the company's current expectation of 16 operating hotels by the end of 2019."

At 1115 BST, the shares were up 43% to 22.90p.