The acquisition of 44.5% of NH Italia from Intesa Sanpaolo will be structured through the issuance of new shares of NH Hotel Group shares. The transaction will entail the issuance of 42,000,000 new shares at an issue price of €4.70 per share.

NH Hotel Group signed an agreement with Intesa Sanpaolo under which it will acquire the latter's 44.5% stake in NH Italia in exchange for shares. Intesa Sanpaolo set up the Italian joint venture with NH Hotel Group, which owns the remaining 55.5%, in 2007.

Accordingly, the deal will entitle NH Hotel Group for the 100% of NH Italia, which is currently active in the hotel business in Italy and the US, as well as operating hotel establishments in Germany, the Netherlands and Belgium.
 
The Boards of Directors of NH Hotel Group and Intesa Sanpaolo have approved the terms of an all-share offer, as follows:

• The issuance of 42,000,000 new ordinary shares, representing approximately 12% of the share capital of NH Hotel Group, post-offer, at an issue price of €4.70 (a par value of €2 and a share premium of €2.70) per share.
• The new shares will be subscribed exclusively by Intesa Sanpaolo in exchange for 445,000 shares representing its 44.5% interest in NH Italia. Since the consideration for the new-issue shares is non-monetary, NH Hotel Group's existing shareholders will not have pre-emptive subscription rights over the shares.

Execution of this transaction will significantly bolster NH Hotel Group's equity, while simultaneously reducing its leverage ratio measured in terms of gross debt to equity. Lastly, the transaction will also make NH Hotel Group's shares more liquid in the secondary market medium term.
 
The capital increase, which has already been approved by the Board of Directors of NH Hotel Group, will be put before the shareholders for approval at the upcoming Annual General Meeting, along with a resolution to appoint a new proprietary director at the proposal of Intesa Sanpaolo.
 
As a result of the capital increase pending to be executed, shareholders' structure would be: HNA (21.2%), GIHSA (17.7%), Intesa Sanpaolo (16.0%) and free float (45.1%). Morgan Stanley acted as financial advisor to NH Hotel Group on the transaction.