The Sheraton-Moriah hotel chain, owned by Koor, Starwood, and Bank Hapoalim, has purchased 50% of the Jerusalem Sheraton-Plaza Hotel from the Israel Corp. at a company value of $26 million. The agreement was signed last Thursday.
The remaining shares in the hotel are held by the Green Tower group, which is owned by four US families: Jesselson, Mirkin, Green, and Stern. The group has an agreement with the Israel Corp., under which sale of the Israel Corp. share in the hotel to a third party confers upon the group the right during 30 days to sell its share to the third party at the same price paid to the Israel Corps.
The Jerusalem Sheraton-Plaza Hotel has 180 hotel rooms and suites. Half of the hotel consists of 72 apartments (189 rooms), privately owned, which are concentrated in the hands of the Green-Tower group.
The Sheraton International chain, which has managed the hotel for many years, also manages the Tel Aviv Sheraton. The Jerusalem hotel was the chain's flagship. In January 1998, after lengthy negotiations, a management agreement was reached for management of the hotel by Sheraton Israel (later Sheraton-Moriah) for ten more years. The Tel Aviv hotel was left with a separate management agreement with the international chain.
Ten years ago, the Sheraton-Moriah exercised its option to purchase the Tiberias Sheraton-Plaza Hotel from the Israel Corp. for $19 million.
At the same time, Sheraton-Moriah is concentrating Koor's hotel holdings in Israel, as part of its preparation for an expected issue. Last Thursday, 100% of Koor's shares in the Sheraton Four Points hotels in Jerusalem and Tiberias were transferred to Sheraton-Moriah. The transaction took place at a company value of $27 million, through a share swap.
Sheraton-Moriah also acquired 50% of Koor's holdings in the Herods Palace and Herods Vitalis Hotels in Eilat for $70 million. This deal was also a share swap.
Sheraton-Moriah general manager Eli Gonen told "Globes" that the chain's shareholders injected funds into the company to complete the transactions, and that the moves were intended to prepare the company for its soon-expected float.
Sheraton-Moriah is owned by Koor (55%), the Starwood group, owner of the Sheraton International chain (25%), and Bank Hapoalim (20%).
Published by Israel's Business Arena on January 3, 2000