PPHE Hotel Group has agreed to enter a joint venture with Israeli insurance firm Clal Insurance.
The group will receive £113.7m from the investor, which will take a stake in existing assets. It will use the cash to pursue new opportunities post-pandemic.
Clal Insurance will own 49% of the joint venture vehicle JVCo, holding the real estate and operations of the 646-room Park Plaza London Riverbank and the 343-room art’otel london hoxton development project. The deal prices the pair at £279.3m.
The investor will also provide a further £12.1m to fund the remaining equity commitments of the Hoxton development, with PPHE topping this up with a further £12.6m.
Clal will also be granted 5m share appreciation rights with a seven-year maturity and a strike price of £16 per share. The upside is capped at £21 per share. The price is a 27.5% discount to the EPRA NAV per share of £22.08 at 31 December and a 3% discount to its closing price of 16.5p yesterday (23 June).
Boris Ivesha, chief executive at PPHE Hotel Group, said: “The agreement values its assets at the group’s latest EPRA NAV level, and the proceeds will enable the group to pursue new growth opportunities as the pandemic period subsides.”
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