Japan Leisure Hotels Limited ("JLH" or the "Company") Statement by Minority Shareholders

By Japan Leisure Hotels Limited, PRNE
Tuesday, June 7, 2011

LONDON, June 8, 2011 -

We are minority shareholders in the Company, and have been
since launch, owning in total 5.5% of the issued share capital. We are
appalled at recent events culminating in the Board disposing of the Company's
six hotels at a price equal to 28.4% of their net asset value. This
represents a cap rate of almost 30%, a price per room of GBP44,000 or GBP67
per square foot of gross floor area. This is an historic low valuation in the
leisure hotel market according to Alchemy Japan, a competitor of the Company.

Despite the difficulties of dealing with an 87.5% majority
shareholder, the Board must take its share of the blame for this disastrous
outcome. The Board knew in early 2010 that the DKR Oasis hedge fund was to be
liquidated and that its shares in the Company were a significant part of that
portfolio. However the Board failed to retain the services of a broker who
could market the company to a wider range of investors than those
institutions who had been contacted during the IPO process. In fact no
significant marketing of the Company has been undertaken in Europe since

The Board says that the current business is not large enough
to support the central overheads but the Company bought a hotel out of
operating cash flow in 2008 and paid a 1p per share dividend in 2010, with a
higher figure projected in 2011 according to independent research. Since the
IPO in 2008, the Company's net asset value has risen by 62% in sterling
terms, a record of some merit compared to many international funds listed in
London. That the share price has fallen by 54% during the same period is
evidence that the Board has failed to promote the Company adequately.

When it came to the current transaction, the Board failed to
engage a financial adviser to manage the process and advise on tactics,
relying on the Nomad to advise on the AIM rules and the Majority Shareholder
to conduct an auction, a job for which he was clearly unqualified. We believe
the erratic conduct of this process led to a number of credible buyers
withdrawing, when they might have made proposals more favourable to the
minority shareholders.

We made it clear to the Board that the minority shareholders
did not wish to participate in a fire sale of assets and preferred to retain
a shareholding going forward. Our preference was to leave the Company listed
and obtain finance for the Company to buy in the DKR Oasis fund's shares for
cancellation. Alternatively, the DKR Oasis fund's JLH shares might have been
distributed to their investors in specie, leaving them to sell shares in the
market, should they wish to exit for cash. Either of these outcomes would
have been better for all the minority investors.


John Phelps, Swan Equities Ltd +44(0)8458-333-832 /+44(0)7855-251215

Alan Richards, West Hill Corporate Finance Ltd +44(0)20-7464-8821 /


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