Disposal of La Manga Club

P&O decided to undertake the sale of the issue capital of the holding company that owned the five star La Manga Club in Spain

" The sale of La Manga Club was a complex and important transaction. We appreciated the committed and professional approach of the team and were very pleased with the outcome. "
- Michael Gradon, Director of Commercial and Legal Affairs, P&O

The Challenge

P&O decided to undertake the sale of the issue capital of the holding company that owned La Manga Club in Spain as part of the their total strategy to re-orientate their business to focus on ferry and port operations.

La Manga Club is a self-contained resort set over 494 hectares with three championship golf courses, a 28-court tennis centre, state of the art health spa, five star Hyatt Regency hotel, four star apartment hotel, apartment vacation club and timeshare, 22 food and beverage operations, a variety of retail facilities, a beach leisure facility, over 400 acres of development land and a mature market for their facilities which extends throughout Europe, parts of America and the Middle East.

Our remit was to produce a detailed memorandum in respect of the business and assets of the holding company, project the financial history, and forecasts and then present to interested parties the opportunity in order to secure a sale at a price which would reflect the recent past investment in the resort..

The challenge was to undertake the international marketing campaign to ensure that the price paid would reflect a level of competition for these assets.

Our Impact

We worked on the property related matters within a team comprising KPMG, Freshfields, P&O and ourselves. Very high quality marketing material was produced in the form of an Information Memoranda, interactive cashflow models, accountancy reports, planning reports, data rooms, budgeting and general marketing material.

The sales process was divided into three refined phases. The initial phase involved face to face presentations to a variety of investors between September and October 2004, followed by the screen selection of 15 of the first phase parties to carry out second phase due diligence including detailed inspections of the resort, access to more detailed information etc. This selection was based on the judged "ability" and "capability" of these parties to be able to review, analyse, procure and finally complete a purchase of this nature.

The third phase then took the 15 down to 3 parties who were asked to review and mark up and submit a detailed Share Purchase Agreement, and submit there full and final bids.

The Outcome

The process certainly ensured that competition had an effect on the price paid. In December 2004, MedGroup, a Spanish leisure and residential/resort property company acquired Inmogolf SA, the holding company of La Manga Club, for a figure of 146m euros.

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