International Herald Tribune
January 1, 2007
JERUSALEM — Delek Real Estate, an Israeli property company, and its partners have agreed to buy 47 British hotels operated by Marriott International from Royal Bank of Scotland for about $2.1 billion.
Delek will purchase a 17 percent stake in the hotels through its Delek- Belron International unit, while Electra Real Estate will buy a 9.9 percent stake, the companies said Monday in separate statements to the Tel Aviv Stock Exchange.
FIBI Holdings, owner of the fifth- largest Israeli bank, said it may take a 5 percent stake in the company.
Dorea Investment & Developments, a real estate company, said in a statement to the Tel Aviv Stock Exchange that it would take a 3 percent stake in the deal.
The companies did not say which other partners would join them in acquiring the hotels, which have a total of 8,456 rooms and will continue to be managed by Marriott under a 30-year agreement. Delek said last month that its partners in the deal included Quinlan Private, a Dublin-based company, and the businessman Igal Ahouvi.
Delek's strategy is to acquire real estate rather than develop its own. The company owns 157 properties in Britain, including 131 parking lots, 16 hotels and 10 office buildings. It is also planning an initial public offering of around 20 percent of Delek-Belron on London's Alternative Investment Market exchange.
Delek and its partners expect an annual net income of £78 million, or $153 million, for the next 10 years from the 47 hotels.
The group will pay £202.7 million from its own capital and will take an £856.1 million loan, the companies said. The group also has access to £62.2 million in loans over the next few years to finance investments in the hotels, they said.
Of the hotels, 39 are in England, five in Scotland, and three in Wales.
Royal Bank of Scotland Group, the second-largest British lender, bought the hotels from a venture of Whitbread and Marriott International in April, in a transaction valued at £951.4 million including working capital, Whitbread said at the time.