Several shareholders of Arena Hospitality’s parent, the PPHE Hotel Group, successfully sold a total of 9,300,000 existing ordinary for GBP 16 per share yesterday. In relative terms such a transaction translates into 17.8x P/E and 11.15x EV/EBITDA.  

The PPHE Hotel Group released a statement yesterday in which they stated that several of their investors successfully sold a total of 9,300,000 existing ordinary shares via an accelerated bookbuilding at a price of GBP 16 per share. In total this gives a secondary placement worth GBP 149m for approximately 22% of PPHE’s share capital (excluding treasury shares). In relative terms such a transaction translates into 17.8x P/E and 11.2x EV/EBITDA. Note that the placing is expected to settle today and that the sellers have agreed with their bookrunners not to sell any further ordinary shares for a period of 180 days.

According to the statement, the sale of shares was done in order to boost the company’s free float which would in turn make it eligible for inclusion in the FTSE UK series of indices. We strongly support such efforts as we believe that the entrance into one of FTSE UK indices would certainly attract more investors, increase liqudity and raise the general awareness of the company. One could also expect these positive effects to spill over to the local market as PPHE’s Croatian subsidiary Arena Hospitality would become the only regional company whose parent is a part of this exclusive group of companies listed on the London Stock Exchange.     

When looking at Arena Hospitality more closely, the company’s share price rose 3% in yesterday’s trading session (to HRK 342), making it one of the day’s best performers. As a result, Arena is currently traded at 19.8x P/E and 8.9x EV/EBITDA.

The results and further details of the transaction can be found on the following LINK.