HNA Group has enlisted bankers to explore the potential sale of its stake in NH Hotel Group.

In a securities filing, HNA said it had brought in JPMorgan and Benedetto, Gartland and Co. to review its 29.3 percent shareholding, and the review will include “the identification of potential buyers.”

Earlier this month, the NH Hotels board turned down a merger proposal from Barcelo, another Spanish hotel company. HNA’s willingness to at least consider a sale means that NH Hotels could become an acquisition target.

Why Now?

HNA’s review of its investment shouldn’t come as a surprise, for a couple of reasons. First, a massive acquisition spree has left it with significant debts. Selling its stake in NH Hotels would bring in some much-needed cash.

Second, HNA has had a fraught relationship with other shareholders in NH Hotels. In 2016, then-CEO Federico González Tejera, as well as four of its board members, were ousted following a battle with UK-based Oceanwood Capital, which owns 12 percent of NH Hotels. Oceanwood believed HNA’s stake in European rival Rezidor Hotel Group presented a conflict of interest.

“The exit of HNA from the shareholder structure would turn less clear the potential M&A with Rezidor but also reduce the uncertainty regarding their strategic interest in the company,” said analysts at Banco BPI in an investor note.

“However, we believe that in the context of a consolidating European hotel industry, NH could remain an M&A target, especially after the restructuring carried out over recent years.”

HNA’s involvement in NH Hotels dates back to 2013. The third minority shareholder is Grupo Hesperia with 9.3 percent stake.

Photo Credit: The NH Trento in Italy. HNA Group is exploring the possibility of selling its stake in NH Hotels. NH Hotels