By Lavern Clarke, Staff Reporter
Kevin Hendrickson
THE BID that National Continental Corporation has made for the Jamaica Pegasus hotel is more than $500 million, Kevin Hendrickson confirmed yesterday.
"It's still in the hands of the Pegasus board and I think they are still looking on it, but I guess it is going to take some time for the process to work itself out," said Hendrickson, who handles the tourism side of the family business. National Continental is still awaiting word from the Pegasus board on the offer.
"I must give the board time to assess the offer properly as a public company because they represent such a broad cross-section of shareholders," Mr. Hendrickson said.
The hotelier, who also manages the Courtleigh Hotel in New Kingston, said their bid price for the Pegasus was based on the hotel's perceived potential assessed on a combination of its 350 room complement, conference facilities, restaurants and bars, and its untapped market potential.
"So far we have been very successful in turning around a number of properties and we hope to do the same with Pegasus."
He refused to give the specific offer price for the property, but minority shareholders in April had asked for confirmation of $5 per share bid, on which the Pegasus board at the time had held back comment pending advice from the Jamaica Stock Exchange that chairman John Issa said the board would be seeking on the offer.
At $5 per share, the offer would amount to over $572 million based on the approximate 114.4 million issued shares. The stock last traded on the exchange at $3.03. The hotel is now being managed by its holding company, Pegasus Hotels of Jamaica Limited, which has appointed Eldon Bremner as interim manager and was in discussion with one of Issa's companies, Village Resort Limited, to act as consultant for the poor performing property.
The hotel has operated in the red since 1997. During that period it was managed by Meridien SA.
Issa was said to be in a meeting and did not return calls yesterday on the status of Hendrickson's bid for 'all or not less than 90 per cent' of the shares.
A successful acquisition would cement the Hendricksons' hold on Kingston's corporate tourism market. It would more than double the rooms they now control in the capital and allow them to develop a super property within New Kingston. The 126-room Courtleigh and Pegasus share boundary lines.
But Kevin Hendrickson also admitted to being "sidetracked" by Knutsford Court, formerly Sutton Place, on which renovations are in the final stages, and so has not been giving much attention to the offer in the past two months.
KNUTSFORD COURT FOCUS
The 180-room property, located on Ruthven Road, was acquired in December 2001 for about $200 million. The Hendricksons have spent over $100 million more so far on refurbishing the rooms, restaurant and lobby area, but is still finalising the meetings rooms, and parking area.
The property is operational with a current 50 per cent occupancy.
"Until the product is finished we are not going to market it aggressively," said Hendrickson.
Asked if the properties they now control wouldn't compete with each other for market share, Hendrickson said the two are positioned at different market segments.
"Knutsford caters more to the long term blue collar workers, and your returning residents. The Courtleigh tends to cater to an executive and diplomatic clientele," said the hotelier.
"I hate to define it but if I had to, I would say the Courtleigh is a three diamond product, while Knutsford is a two diamond."
