Acquisition

10 Apr 2008 07:54

Park Plaza Hotels Limited10 April 2008 10 April 2008 Park Plaza Hotels Limited ("Park Plaza" or "the Company") Acquisition of shareholding in Croatian hotel owner Park Plaza, owner, operator and franchisor of hotels in Europe, the Middle Eastand North Africa, today announces that it has acquired, through its wholly-ownedsubsidiary, Euro Sea Hotels N.V., a 20% stake in WM/DMREF Bora B.V. (Bora) froma group of real estate investment funds sponsored and managed by Goldman Sachs.As part of the transaction, Park Plaza is also acquiring 20% of the debtcurrently provided to Bora by its shareholders. The total cost of theacquisition, including the debt being acquired, is €22.3 million, which will befunded from Park Plaza's existing cash resources. Bora was formed on 23 July 2007 for the purpose of acquiring a controllinginterest in Arenaturist d.d. (Arenaturist), a public company listed on theZagreb (Croatia) Stock Exchange, and three related private companies. Boracurrently owns approximately 74% of Arenaturist and 100% of the three privatecompanies. These companies together own eight hotels and five apartmentcomplexes in and around Pula on the Istrian coast of Croatia. The hotels andapartment complexes currently have approximately 3,000 keys, suites andapartments, and provide accommodation and services primarily for leisuretravellers. Arenaturist and the three related companies also operate fiveisland and coastal properties, which are currently used as campsites, and anumber of other properties also near Pula. Bora intends to significantly upgrade and refurbish the hotels and apartmentresorts. A number of the hotels will be branded Park Plaza Hotels & Resorts andwill offer accommodation and services in line with the core values of affordableluxury associated with the brand. There are also plans to enhance andreposition the portfolio through significant investment and possible upgrades tothe portfolio's conference and recreation facilities in order to broaden therevenue and target customer base of the properties. In addition to its investment in Bora, Park Plaza and Arenaturist will alsoenter into an agreement under which the Park Plaza group will manage and operatethe portfolio of properties for an initial term of 20 years. As at 31 December 2007, the net asset value of Bora, based on unauditedmanagement accounts was €1.1 million. For the period ended 31 December 2007,based on unaudited management accounts, Bora made a loss of €0.2 million. As at31 December 2007, the audited net asset value of Arenaturist was €0.7 million.For the year ended 31 December 2007, Arenaturist made an audited profit of €0.5million. Park Plaza's management believes that Bora's portfolio of properties is wellplaced to benefit from Croatia's growing status as a popular destination forinternational travellers. According to the Croatian Ministry of Tourism, thenumber of international visitors to Croatia almost doubled between 2000 and2006, with Istria, in which Pula is located, being the most visited area of thecountry. As a result, there is strong demand for leisure travel accommodation,with opportunities in other segments including business travel. Upscale segmenthotels in the country are currently achieving average room rates at Europeanlevels, and the pricing environment is expected to benefit from the continuingshortage of available high quality hotel rooms. Lowscale segment hotelsexperience high levels of seasonal volatility and low occupancy rates for theyear as a whole, due to the current industry emphasis on one week summerholidays and insufficient low season offerings. The Bora properties are located in an area with good transport links to largetourist markets, such as Italy, Germany and Austria. In addition, Park Plaza'sstrategic partnership with Carlson group of companies (Carlson), one of theworld's largest travel and hospitality companies, will give Arenaturist'sportfolio access to Carlson's reservation and distribution system, partnershipswith 19 airlines, loyalty programmes for guests and travel agents, andcross-selling opportunities. Besides Park Plaza, Carlson brands include Regent,Radisson, Country Inn & Suites, Park Inn and Carlson Wagonlit Travel. Carlson'splatform, which also supports the cross marketing of nearly 1,000 hotels andresorts in 70 countries provides a powerful tool for marketing the Arenaturistportfolio to a significant database of mid to upscale segment business, leisureand resort travellers. Boris Ivesha, Chief Executive Officer of Park Plaza, said: "This investmentprovides an excellent opportunity to capitalise on our expertise in theredevelopment and management of hotel properties and conference centres. Ouraffiliation with the Carlson hotel and resort network gives us a distinctadvantage in the marketing of these properties, which are located in a primearea of outstanding natural beauty that is attracting a growing number oftravellers. "Over the next three to four years, we believe there is a substantialopportunity to increase the value of our investment in Bora and grow the ParkPlaza Hotels & Resorts brand by broadening the revenue and target customer baseof the Arenaturist properties." www.parkplazahotels.net Enquiries: Park PlazaBoris Ivesha, Chief Executive Officer Tel: +44 (0)20 7034 4800Chen Moravsky, Finance Director Tel: +31 (0) 20 305 8351 Hudson Sandler Tel: +44 (0) 20 7796 4133Jessica Rouleau/Wendy Baker Notes to Editors The Park Plaza group is owner, operator and franchisor of hotels in Europe, theMiddle East and Africa. The group operates under two brands: Park Plaza Hotels& Resorts (part of Carlson Hotels Worldwide), over which the group has exclusiverights in 56 countries in EMEA and art'otel, a brand to which the Group hasexclusive worldwide rights. Park Plaza Hotels also manages the luxury all-suitePlaza on the River - Club and Residence, London. Through its strategic partnership with Carlson, one of the world's largesttravel and hospitality companies, Park Plaza Hotels has access to Carlson'spowerful reservation and distribution system, airline partnerships with 19airlines, loyalty programmes such as goldpointsplusSM for guests and Look ToBook(R) for travel agents, and cross-selling opportunities. There are currently 26 properties and over 4,700 rooms in the Group's portfolio.By 2010, the Group's committed projects and territorial franchise agreementsare expected to increase the number of rooms to over 8,000. Projects already under development include Park Plaza Marrakech (2009), ParkPlaza Nuremberg (2009), art'otel cologne (2009) and Park Plaza WestminsterBridge, London (2010). Park Plaza Hotels floated on London's AIM Stock Market in July 2007. END This information is provided by RNS The company news service from the London Stock Exchange