1 March 2016
PPHE Hotel Group Limited
PPHE Hotel Group to acquire 80% interest from its joint venture partner in Croatia and associated takeover offer for Arenaturist d.d. and strategic plans for Central and Eastern Europe
PPHE Hotel Group Limited (the Company), which together with its subsidiaries (the Group) owns, leases, develops, operates and franchises full service upscale and lifestyle hotels in major gateway cities and regional centres, predominantly in Europe, is pleased to announce the following:
Summary
· The Group to acquire outstanding 80% interest, which it does not currently own, in its joint venture in Croatia for an aggregate cash consideration of €51 million (approximately GBP40.0 million).
· The joint venture indirectly owns 74.15% of the issued share capital of Arenaturist d.d (Arenaturist), a Croatian public company traded on the Zagreb Stock Exchange, and 100% ownership of three Croatian private companies (together the Arenaturist Group). These companies together own seven hotels and six apartment complexes and have ownership interest in eight campsites in Istria, Croatia.
· For the year ended 31 December 2015, the Revenue of Arenaturist Group was approximately GBP40.4 million and EBITDA was approximately GBP12.4 million .
· As a result of the Acquisition, the Company is required to make a mandatory takeover offer (the Offer) for the outstanding share capital of Arenaturist. Subject to completion of the Acquisition and of the Offer, the Group has entered into agreements with two Croatian institutional investors to sell Arenaturist shares representing 9% and 1% respectively of the issued share capital , and was given an option to sell an additional 4% of the issued share capital, in each case for approximately HRK285 (approximately GBP29.17) per share.
Acquisition of 80% interest from its joint venture partner in Croatia
The Company is pleased to announce that its wholly-owned subsidiary, Euro Sea Hotels N.V. (Euro Sea), has today agreed to acquire the remaining 80% of the shares in WH/DMREF Bora B.V. (Bora) and all existing shareholder loans to Bora or its subsidiaries which it does not currently own from entities affiliated to certain funds managed by Goldman Sachs (its joint venture partner in Croatia), for an aggregate cash consideration of €51 million (approximately GBP40.0 million) (the Acquisition).
The consideration for the Acquisition comprises:
a) 5 million cash deposit payable on signing; plus
b) €35 million in cash payable on completion; plus
c) a deferred consideration, payable on or prior to 31 December 2016 equal to €10 million plus interest of €1
million which is guaranteed by the Company.
Completion of the Acquisition is expected to take place on 13 April 2016 subject only to: (a) certain warranties being true and accurate in all material respects; and (b) the parties having performed in all material respects their respective obligations in connection with the Acquisition, as at that date.
Bora indirectly owns 1,618,263 shares in (representing 74.15% of the issued share capital of) Arenaturist and 100% of three Croatian private companies. These companies together own seven hotels and six apartment complexes and have ownership interests in eight campsites in Istria, Croatia. Four of these hotels operate under the Park Plaza brand with the remaining hotels, resorts and campsites operating under independent names, as part of the Arenaturist portfolio.
In addition to the Acquisition, the Group has entered into agreements with two Croatian institutional investors, Allianz ZB d.o.o and PBZ Croatia Osiguranje d.d., to sell 196,425 Arenaturist shares (representing approximately 9% of the issued share capital) and 21,825 Arenaturist shares (representing approximately 1% of the issued share capital) with an option to sell an additional 87,300 Arenaturist shares (representing approximately 4% of the issued share capital) respectively from Bora for a purchase price of HRK285 (approximately GBP29.17) per share). This agreements are conditional on the completion of both the Acquisition and the Offer as defined below.
Takeover offer for Arenaturist
As a result of the Acquisition and subject to completion of the Acquisition, Euro Sea is required to make a mandatory takeover offer (the Offer) for the remaining 564,237 shares in (representing 25.85% of the issued share capital of) Arenaturist pursuant to the Croatian Takeover Act. In accordance with that Act, the Offer will be unconditional.
Pursuant to the Offer, Euro Sea will offer to acquire each outstanding Arenaturist share at a price calculated as a weighted average price of an Arenaturist share on the Zagreb Stock Exchange for the three month period ended yesterday (expected to be HRK325 (approximately GBP33.27)). Following the Croatian Financial Services Supervisory Agency approval of the Offer, the Offer is expected to be open for a period of 28 days commencing on the date the Offer is announced in the Official Gazette of the Republic of Croatia and on the Zagreb Stock Exchange Inc.
The Acquisition will be financed partly from the Group's cash balances and partly by way of a €30 million loan from Zagrebačka banka d.d..
Boris Ivesha, President & Chief Executive Officer of the Company, said:
"The acquisition of further shares in Arenaturist provides the Group with the opportunity to accelerate the growth of the Park Plaza brand in Central and Eastern Europe. This is an exciting development for both the Group and Arenaturist."
Enquiries:
PPHE Hotel Group Limited |
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Boris Ivesha, President & Chief Executive Officer |
Tel: +44 (0)20 7034 4800 |
Chen Moravsky, Deputy Chief Executive Officer & Chief Financial Officer
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Tel: +31 (0)20 717 8603
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| Hudson Sandler Public Relations |
Tel: +44 (0)20 7796 4133 |
Wendy Baker / Kate Matthews |
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Notes to editors
PPHE Hotel Group Limited is a Guernsey registered company and through its subsidiaries, jointly controlled entities and associates, owns, leases, operates, franchises and develops full service upscale and lifestyle hotels in major gateway cities and regional centres, predominantly in Europe.
The majority of the Group's hotels operate under two distinct brands, Park Plaza® Hotels & Resorts and art'otel®. The Group has an exclusive licence from Carlson, a global privately held hospitality and travel company, to develop and operate Park Plaza® Hotels & Resorts in Europe, the Middle East and Africa. The art'otel® brand is fully owned by the Group.
The Group has a minority ownership interest in the Arenaturist group, one of Croatia's leading hospitality companies.
The portfolio of owned, leased, managed and franchised hotels comprises 38 hotels in operation offering a total of more than 8,300 rooms. The development pipeline includes five new hotel projects and one hotel extension and reconfiguration. These developments are expected to add over 1,000 rooms to our portfolio by the end of 2016 and an additional 500 rooms by the end of 2019.
Our Company:
www.pphe.com
Our Hotel Brands:
www.parkplaza.com
www.artotels.com
www.arenaturist.com
For images and logos visit www.vfmii.com/parkplaza
Forward-looking statements
This trading statement may contain certain "forward-looking statements' which reflect the Company's and/or the Directors' current views with respect to financial performance, business strategy and future plans, both with respect to the group and the sectors and industries in which the group operates. Statements which include the words "expects", "intends", "plans", "believes", "projects", "anticipates", "will", "targets", "aims", "may", "would", "could", "continue" and similar statements are of a future or forward-looking nature. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause the group's actual results to differ materially from those indicated in these statements. Any forward-looking statements in this interim management statement reflect the group's current views with respect to future events and are subject to risks, uncertainties and assumptions relating to the group's operations, results of operations and growth strategy. These forward-looking statements speak only as of the date of this interim management statement. Subject to any legal or regulatory obligations, the Company undertakes no obligation publicly to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. All subsequent written and oral forward-looking statements attributable to the group or individuals acting on behalf of the group are expressly qualified in their entirety by this paragraph. Nothing in this publication should be considered as a profit forecast.
