The part of the IPO by hotel company Fattal Holdings for investment institutions is about to culminate in a big success. Fattal, which sought to raise NIS 340 million at a company value of NIS 3.4 billion, before money, today obtained commitments from investment institutions to buy shares for over NIS 1 billion.
The auction envelopes will be opened, revealing how much the company decided to raise, and at what value. The part of the IPO for the public is scheduled to take place in the coming days.
Last week, Fattal Holdings controlling shareholder David Fattal was forced to cut the company value for the IPO by 15%, apparently under pressure from the underwriters, led by Leader Underwriters, Orion, Poalim IBI Underwriting and Investments Ltd. (TASE:PIU), and Barak Capital. The institutional stage of the IPO therefore took place at a company value of NIS 3.4 billion, rather than the NIS 4 billion value at which Fattal planned to issue 10% of its capital. The minimum value is before a 2.5% prior commitment charge, so the value of the company for investment institutions participating in the IPO will be NIS 3.3 billion. Reasons for the lower value include the upheaval in stock markets in Israel and overseas and the failure or partial success of equity offerings carried out on the stock exchange in recent months.
Fattal Holdings, founded by David Fattal 20 years ago, currently has 167 hotels with 32,000 rooms in 17 countries worldwide. Shareholders in the company include David Fattal (71.8%), his divorced wife Hadassah Fattal (9.65%), and Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) (18.55%). The cost of David Fattal's salary as CEO of the company is NIS 9 million annually.
Fattal Holdings has benefited from the tourism boom in Israel, and especially in Europe, in recent years. Incoming tourism has been prospering (Fattal Holdings' figures indicate that over half of global foreign tourism is concentrated in Europe). The company says that this trend is projected to continue in the coming years, given the increase in leisure and average salaries in Western Europe.
Published by Globes [online], Israel Business News - www.globes-online.com - on February 12, 2018
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