Dayan family cancels original deal with Africa-Israel for larger sale

Africa-Israel Hotels currently owns a 50-percent interest in the Crowne Plaza Dead Sea Hotel in Ein Bokek, Israel. (The new deal with the Dayan family is set to generate NIS 130 million for Africa-Israel and Netz.)

Following the family's NIS 524-million acquisition of four hotels from Africa-Israel Investments, the Dayans have signed another deal to gain full ownership of the Africa-Israel Hotels subsidiary for NIS 413 million, according to Globes.

The Netz Group said that the current deal will be finalized if the director general of the Antitrust Authority approves the sale. Once finalized, the deal is expected to generate NIS 130 million in new cash flow for Africa-Israel Investments and Netz. The first deal with the Dayan family generated only NIS 50 million in net cash flow for Netz and NIS 615 million for Africa-Israel Investments.

Africa-Israel Investments and Netz Group have ownership of Africa-Israel Hotels in equal shares. The two companies began their partnership five years ago when Netz bought 50 percent of Africa-Israel Hotels for NIS 180 million. 

Africa-Israel Hotels has a franchise to operate hotels with the Crowne Plaza and Holiday Inn names. Eight hotels in Israel are operated by Africa-Israel Hotels under these brands while some of them are fully owned. The group has leased two other hotels in Eliat—La Playa Hotel and Be City Hotel—to third parties. 

At the end of 2016, Africa-Israel Hotels had NIS 400 million in revenue—a 4.3-percent increase over the previous year—along with a NIS 14 million loss. The company's sale of the four hotels this year allowed it to repay a NIS 380-million bank loan.
Meanwhile, Africa-Israel Hotels also agreed to sell the Crowne Plaza Jerusalem hotel to the Dayan family in another deal. However, this deal was not finalized and will be canceled in favor of the new agreement, in which the Dayans will acquire Africa-Israel Hotels completely.

Africa-Israel Hotels currently owns the Crowne Plaza Jerusalem, the Crowne Plaza Haifa and the Crowne Plaza City Center Hotels in the Azrieli Towers in Tel Aviv. The company also has a 50-percent interest in the Crowne Plaza Dead Sea Hotel while it manages the Bay View Hotel in Haifa and the Holiday Inn Ashkelon Hotel. In Q1 2017, Africa-Israel Hotels had NIS 62 million in revenue and a NIS 29-million gross profit. After posting a NIS 123-million capital gain on the sale of its four hotels, Africa-Israel's net profit totaled NIS 120 million in Q1 2017. 

Advocate Tal Benenson represented the Dayan family during the sale.