London

THE BOARD of British budget hotel chain easyHotel Plc on Monday recommended a bid from a consortium of Canadian real estate fund Ivanhoé Cambridge and Luxembourg's ICAMAP Investments, drawing an immediate rejection from founder Stelios Haji-Ioannou.

Shares of easyHotel surged 35.5 per cent, trading slightly above the offer price of 95 pence per share, which values the company at about £138.7 million (S$232 million).

"I find the offer from ICAMAP to be very low and I urge all other shareholders to take no action (ie not accept the ICAMAP offer) until the true value and future potential of easyHotel can be evaluated," Mr Haji-Ioannou, who owns around 27 per cent of the company, said in a statement.

ICAMAP, the largest shareholder in easyHotel with a 38.65 per cent stake, said it identified Ivanhoé Cambridge to help develop easyHotel, which the real estate fund says needs "significant investment".

"Ivanhoé Cambridge and ICAMAP believe that the current structure of the Company's shareholder base is ill-suited to attracting the new capital the Company needs to fund its long-term investment programme," according to a joint statement by the companies.

Harm Meijer, one of the founding partners of ICAMAP, said a change in ownership was essential to enable the company to navigate the current market uncertainty and it is "open-minded" about whether easyHotel remains a publicly traded company or becomes private. REUTERS