Dayan family buys Africa-Israel Hotels

Crowne Plaza Photo: Tamar Matsafi

The family bought four hotels from Africa-Israel for NIS 524 million in 2017 and is now paying NIS 413 million more for full ownership.

The Dayan family is expanding its hotel business at the expense of Africa-Israel Investments Ltd. (TASE:AFIL). After buying four hotels from Africa-Israel Hotels for NIS 524 million in 2017, the Dayan family today signed another deal to acquire full ownership of Africa-Israel Hotels for NIS 413 million.

Africa-Israel Hotels is owned in equal shares by Africa-Israel Investments and Netz Group Ltd. (TASE:NETZ). The two group's partnership began five years ago, when Netz acquired 50% of Africa-Israel Hotels for NIS 180 million.

Netz said that completion of the current deal was contingent on due diligence and approval by the Antitrust Authority director general. If the deal is completed, it will generate NIS 130 million in net cash flow for both Africa-Israel Investments and Netz. The previous deal, incidentally, generated NIS 50 million in net cash flow for Netz and NIS 65 million for Africa-Israel Investments.

Africa-Israel Hotels has a franchise to operate hotels bearing the names Crowne Plaza and Holiday Inn. The company operates eight hotels in Israel under these brands (some of them fully owned), and has leased to third parties two other hotels it owned in Eilat: La Playa Hotel and Be City Hotel.

Africa-Israel Hotels finished 2016 with NIS 400 million in revenue, a 4.3% increase, but also a NIS 14 million loss. Africa-Israel Hotels' sale of four hotels this year enabled the company to repay a NIS 380 million bank loan. At the same time, Africa-Israel Hotels also signed another deal for the sale of the Crowne Plaza Jerusalem Hotel to the Dayan family. This deal, however, was not completed, and will now be canceled in favor of the new deal, in which the Dayan family is acquiring Africa-Israel Hotels as a whole.

As of now, Africa-Israel Hotels owns the Crowne Plaza Jerusalem, Crowne Plaza Haifa, and Crowne Plaza City Center Hotels, the latter located in the Azrieli Towers in Tel Aviv. It also has a 50% interest in the Crowne Plaza Dead Sea Hotel, and manages the Bay View Hotel in Haifa and the Holiday Inn Ashkelon Hotel. Africa-Israel Hotels had NIS 62 million in revenue and a NIS 29 million gross profit in the first quarter of 2017. Its net profit in the quarter was NIS 120 million, after it posted a NIS 123 million capital gain on its sale of four hotels during the quarter.

The Dayan family consists of nine brothers and three sisters, with Miki the oldest at 65 and Amir the youngest at 43, as well as Shalom, Roni, Miriam, Avi, Itzik, Yaakov, Yaffa, David (deceased), and Yehuda. Advocate Tal Benenson represented the Dayan family in the deal.

Published by Globes [online], Israel Business News - www.globes-online.com - on July 16, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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Crowne Plaza Photo: Tamar Matsafi
Crowne Plaza Photo: Tamar Matsafi
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