Arena Hospitality Group raises €106mn in Croatia’s biggest post-crisis IPO

Arena Hospitality Group raises €106mn in Croatia’s biggest post-crisis IPO
By Akin Nazli in Belgrade May 26, 2017

Croatian tourism company Arena Hospitality Group, formerly Arenaturist, raised a total of HRK788mn (€100mn) in a public offering held between May 15 and May 25, the company said on May 26 in a filing with the Zagreb Stock Exchange (ZSE).

Arena’s public offering is the largest in the Adriatic country since Croatia Telecom’s IPO in 2007. It is also the first international public offering held by a Croatian tourism company. The IPO came as major companies in other Southeast European countries are again eyeing stock market listings.

Arena issued a total of 1.86mn new shares with a price of HRK425 per share, the statement from the company added. Arena shares are expected to start trading on the ZSE on June 6.

“We are pleased that about 20% of the newly-issued shares were acquired by international investors,” Arena chairman Boris Ivesha said on May 26.

Following a successful roadshow during which Arena’s team visited existing and potential investors in cities such as Zagreb, Ljubljana, London, Stockholm, Tallinn and Vienna, Arena’s shareholder base has been expanded, according to Ivesha.

London-based PPHE Hotel Group issued 141,883 new shares while its indirect stake in Arena will decline to 51.97% from the current 77.09%.

Arena will use the proceeding from the public offering to finance its upgrade plans for its properties as well as its expansion in the CEE region, the company said in a press realease.

Arena plans to exercise an option to acquire the remaining 12% stake in Sugarhill Investments B.V. from the PPHE Hotel Group. Following the acquisition of the Sugarhill stake, Arena will indirectly own Sugarhill’s operations in Germany and Hungary.

Arena also plans to refinance and repay its existing debts.

InterCapital Securities, UniCredit Bank and Zagrebacka Banka served as intermediaries for Arena’s public offering.

Last year, PPHE Hotel Group acquired a majority stake in Arena and announced plans for regional expansion.

PPHE later merged all its hotels in the CEE region, including eight Park Plaza hotels and one Art’otel in Germany and Hungary, under Arena. Arena has operating rights for the Park Plaza brand in 18 countries across the CEE region.

Arena currently operates 27 hotels across Croatia, Germany and Hungary with a total bed capacity of more than 10,000 rooms in cities such as Berlin, Cologne, Nuremberg, Budapest and tourist destinations in Istria.

Elsewhere in Southeast Europe, shareholders of diversified telecom operator Digi Communications, the parent company of Romania's RCS & RDS, exited part of their stakes in the IPO of the company earlier in May. This was Romania’s largest ever private sector IPO, and followed the listing of another major private sector company, Medlife, in 2016. 

Meanwhile, the Slovenian government is preparing for an IPO of the country’s largest bank Nova Ljubljanska Banka (NLB), which Ljubljana is required to sell by the end of this year under its commitments to the European Commission.