Fattal sells Munich hotel for €157m

David Fattal Photo: Rafi Deloya

The price was €25 million higher than the hotel's book value and the company has leased back the hotel for 30 years.

Fattal Holdings 1998 Ltd. (TASE: FTAL) is selling the Leonardo Royal Hotel in Munich for $157 million, €25 million higher than the hotel's value in the company's books.

At the same time, Fattal contracted a lease with the buyer under which the hotel will be leased to Fattal for 30 years at €7.2 million a year in management fees or 32% of the hotel's revenue turnover, whichever is higher.

The Leonardo Royal Hotel, located next to the Olympic park, has 424 rooms, nine meeting halls, a conference hall, a restaurant, a bar, and a fitness room.

With the completion of the deal, which is subject to a number of suspending conditions, the company's shareholders' equity will increase by €11 million, but its EBITDA will fall by €7.2 million a year.

The Fattal hotel chain, controlled by the Fattal family (a 72.1% interest) and Migdal (16.4%), was founded in 1999 by chairperson and CEO David Fattal. The chain specializes in holding, operating, renting, and managing hotels in Israel and Europe through corporations under its control and in the acquisitions and construction of new hotels.

In Europe, where the chain is managed by Daniel Roger, it has 131 hotels: 48 owned completely or partially, 79 rented, and four managed. The hotels are located in Germany, UK (including England, Scotland, Wales, and Northern Ireland), Spain, Belgium, Italy, Cyprus, the Czech Republic, Netherlands, Switzerland, Poland, Hungary, and Australia.

The chain's largest concentration of hotels is 61 in Germany, followed by UK with 43.

The Fattal chain's share price rose today, completing a surge of over 30% since the company's IPO in late February and pushing its market cap up to NIS 5.8 billion.

David Fattal said, "The current deal again shows that Fattal Europe is carefully selecting its properties and improving them. It is able to take advantage of sale opportunities at prices substantially higher than the book value of the properties. In this deal, we spotted a terrific opportunity to sell the Leonardo Royal Hotel in a sale and leaseback deal at a price 20% higher than the property's book value. We have signed a rental agreement with the purchaser, and we expect to increase the company's shareholders' equity by €11 million (after tax). We'll continue to operate according to our strategic plan and strengthening our grip in Israel and Europe in order to expand the company to new instruments."

Published by Globes [online], Israel business news - www.globes-online.com - on May 21, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

David Fattal Photo: Rafi Deloya
David Fattal Photo: Rafi Deloya
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