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Autogrill bids for Host
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July 26, 1999: 7:40 a.m. ET
Italian caterer offers $529M for U.S. rival; deal would create fast-food titan
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LONDON (CNNfn) - Italy's Autogrill, the second-largest fast-food catering group in Europe, launched a cash bid Monday for Host Marriott Services Corp. of the U.S. valued at $529 million.
The merger, which has been unanimously approved by Host Marriott's board, will spawn the world's largest restaurant and catering chain aimed at travelers.
Autogrill has offered a 50 percent premium of $15.75 for each common share of Host Marriott Services (HMS), a Bethesda, Maryland-based catering giant that was a subsidiary of Host Marriott Corp. before its spin-off in 1995. The expanded group would have total sales of $2.6 billion from more than 800 venues in Europe, Asia and North America.
Last year, Host Marriott Services had sales of $1.38 billion and gross operating earnings of $126 million generated from its operations in almost all of the largest metropolitan airports in the United States.
Gilberto Benetton, patriarch of the Italian family that presides over the Benetton clothing enterprise, and who is a majority owner of Autogrill, said the enlarged company would be the world's leading operator of airport and tollroad concessions.
Autogrill has annual revenues of $1.2 billion generated through 636 restaurants and bars in nine European countries. Its fast-food empire includes its signature highway restaurant, Autogrill, the pizza chain Spizzico, and brands like Burger King. The latter has granted Autogrill an exclusive license to its franchise in Italy.
After a brief suspension, Autogrill shares were up 1.7 percent at 0.1 euros in Milan Monday. Host Marriott stock closed at $10 in New York Friday.
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