Directors of budget hotel chain easyHotel have recommended accepting a proposed investment in the company from a new consortium.

The proposed investment comes from Citrus UK Bidco which has been set up by existing largest shareholder ICAMAP and Cadim Fonds, part of Ivanhoé Cambridge.

The deal could see the operator, which is listed on the AIM stock market, taken private.

The investment bid is for the shares in easyHotel which ICAMAP currently does not own. ICAMAP has invested £58 million into easyHotel and owns 38.65% of its issued shares.

The proposed deal values the hotel chain at £126.1 million and will enable it to attract new capital to fud its long-term investment programme.

Jonathan Lane OBE, chairman of easyHotel, said: “The Independent easyHotel directors consider that the offer is fair and reasonable and in the best interests of shareholders, the company, its employees and wider stakeholders.

“Liquidity in easyHotel stock has been limited since the company was admitted to AIM five years ago.

“If accepted, the offer should enable the easyHotel Group to accelerate its expansion into major European cities where it sees significant opportunity, underpinning the long-term growth and prosperity of the easyHotel brand.”

Karim Habra, head of Europe for Ivanhoé Cambridge, said: “We are pleased with our proposed investment in easyHotel, a disruptive and innovative model that has already proven its success and has the potential for the creation of a leading European budget hotel platform.

“Alongside our partner, we intend to support the cgrowth and expansion across Europe. This investment aligns with our objectives to diversify in new strategies by seeking value-creation opportunities.”

Harm Meijer, managing director of ICAMAP Advisory and one of the founding partners of ICAMAP, added: “We have been a shareholder in easyHotel since October 2016 and have been the principal supporter of two capital raises.

“We continue to believe in the long-term strategy of the business. However, we also believe that the company needs a change in its shareholder base in order for easyHotel to become a true leading pan-European budget hotel player.

“In our view, Ivanhoé Cambridge and ICAMAP are ideally positioned to provide the capital and stewardship the Company needs.

“Our offer enables shareholders to exit from an illiquid stock at a 34.8%. premium and, we believe, will result in greater clarity of ownership and direction for the company and its management team.

“We are open-minded about whether easyHotel remains a publicly traded company or becomes private.

“In either case, we believe that the change of ownership which our offer will deliver is essential to enable easyHotel to navigate the current market uncertainty and to thrive in the future.”