Ahouvi and Delek buying 16 Hilton hotels in Great Britain
Ahouvi and Rozanski were thought to be in talks with Israel Phoenix Assurance toward bringing in as a partner in the deal.
By DANIEL KENNEMERPublished: NOVEMBER 25, 2005 01:34Advertisement
Igal Ahouvi's Managed Hotels Unit Trust and Delek Real Estate have purchased 15 Hilton hotels in the United Kingdom and agreed to buy a 16th, for a total of roughly NIS 3.5 billion, a source close to the deal confirmed Thursday.
The source stated further that Ahouvi and Delek Real Estate CEO Ilik Rozanski were conducting negotiations toward bringing two or three more partners into the deal, and intend to divide it up evenly, with each party holding 20% or 25% of the value. They expect to recruit the partners within two weeks.
Reports in the Hebrew press Thursday speculated that Ahouvi and Rozanski were in talks with Israel Phoenix Assurance toward bringing in as a partner in the deal.
Delek Real Estate's official notices to the Tel Aviv Stock Exchange Thursday, however, continued to claim that the company was still only "examining joining the deal." Delek told the Tel Aviv Stock Exchange that its part in the deal could range from 19% to 30%.
Hilton, which had announced Tuesday that it had completed the sale of the first 15 hotels to Managed Hotels, will keep its banner on the buildings, and continue to manage them as full Hilton hotels for at least the next 30 years, with two options for additional 10-year periods thereafter. Hilton also expects to earn around 5.4 million yearly from the management contracts on the original 15.
Funding for the initial purchase was provided by the Royal Bank of Scotland.
Included in the deal were the Hilton at Gatwick Airport, Hilton London Olympia on Kensington High Street, and several more ranging from Aberdeen, Scotland to Bristol, England. The sixteenth is located at Edinburgh Airport.
The 16 hotels contain a total of 3,100 rooms.
The first fifteen were sold for 382.4 million, 12% above their net book value of 341.4 million, Hilton said. Proceeds from the sale would be used initially to pay the chain's debts.
Hilton International intends to sell further hotels valued in excess of 400m., including the Hilton London Metropole and Hilton Birmingham Metropole.