Confifi Hotels to carry on as usual

Confifi Hotels said it will carry on as usual after the Keells Hotel Plc’s (KHP) share swap deal to take a majority stake in Confifi this week failed.

“KHL made an offer but the shareholders’ response was very poor and they virtually rejected the offer. But we will carry on as usual,” Professor M.T.A. Furkhan, Chairman Confifi Management Services, the management company of Riverina Hotel, Eden Hotel and Club Palm Garden Hotel, told The Sunday Times FT.

He said that there are many ‘rumours’ in the market that other parties are interested, but it is not true. “We have not had any written offers after this from anyone as yet,” he said. Professor Furkhan, however did not rule out the fact that the company would consider offers if they do come. “If we do get any offers, we will give it a thought, but we will not chase behind anyone, because we do not need to,” he reiterated.

He said the hotels, in any case, are doing well. “Riverina has recorded full occupancy and Club Palm Garden is 90 percent full. Eden Hotel is at 75 percent and in the west coast, we are doing the best,” he noted.

When asked why he had not participated at the Board of Directors meeting when the independent valuation was discussed, he said that it was in keeping to the best practices. “According to Securities and Exchange Commission rules, the directors are required to give an opinion on whether the voluntary offer is good or bad.

Normally when voluntary offers come, there are not commitments or obligations on the part of the directors. In this case the KHP offer was discussed with myself and two other directors and in principle we agreed to the offer. Then we felt that as interested parties if we sit on the board it is not good corporate governance and good ethical practice,” he said.

The independent valuation had not recommended to accept the KHP’s offer to acquire 100 percent of the issued shares of the three hotels as they feel the asset value of the hotels are greater than the price they are being offered. Early last month, KHP announced voluntary offers to acquire 100 percent of issued shares of each of the three listed hotel companies in the form of a share swap where KHL would issue its own shares.

Confifi Management Services has 30 percent in all the hotels. KHL in the conditions has stated that it needs 51 percent of CMS for the deal to go through. The offer was for roughly 174 million shares worth at around Rs. 1.39 billion.