Isrotel (TASE:ISRO) today announced that it was about to buy the controlling interest in the Isrotel Lagoona hotel in Eilat. The acquisition will be made at a value of $19.25 million, depending on the results of Lagoona Hotel Ltd., at the end of 2004.
Isrotel currently owns 25.1% of Lagoona Hotel Ltd. Yuli Ofer's Coral Beach Eilat Ltd. owns the other 74.9%. Isrotel will buy out Yuli Ofer. Isrotel currently manages the Lagoona hotel. Fattal Hotel Management manages Yuli Ofer's other two hotels.
Isrotel said it expects its annual turnover to rise 7% to NIS 500 million a year, after acquiring the Lagoona hotel.
Deals have recently again been taking place in Israel's hotel industry, after a hiatus of several years, due to the crisis in the industry. Fattal Hotel Management CEO David Fattal recently acquired the controlling interest in the Magic Nirvana Club hotel at the Dead Sea from Oded Ronen. Africa Israel Hotels (TASE:AFHO) is negotiating to buy the Golden Tulip Hotel at the Dead Sea from A. Levy Investments and Construction Ltd. (TASE:LEVA), although the negotiations are in trouble. Isrotel recently bought Jerusalem's Rimonim Hotel for $15.1 million from its receiver.
Isrotel is Israel's third largest hotel chain.
Yuli Ofer recently told "Globes" in an exclusive interview that he was dissatisfied with the Lagoona hotel's return on capital.
Published by Globes [online], Israel business news - www.globes.co.il - on January 6, 2005