Austrian-based Strabag, the main shareholder in JW Marriott hotel, is prepared to sell part of the shares it holds in the Bucharest hotel.
"We have not settled on a price with Mr. Taher," said Christian Ebner spokesman of the Strabag group, who explained why negotiations for the share transfer started by Strabag with Fathi Taher, who holds a minority stake in the hotel, fell through.
In mid-2007, Fathi Taher announced he was in advanced talks with the hotel's majority shareholder, Strabag, to acquire 35%, but said there was also the possibility that he would sell his stake, so the Austrian group could then sell the hotel to an investment fund.
Christian Ebner stated that talks had not resulted in any deal so far, and that the Austrians were still the main shareholders of the hotel.
"We wanted to sell the majority stake to Mr. Taher, but we have not done so yet. We will sell if we get the right price for this hotel, which we are very proud of," explained Ebner.
Strabag has been the majority shareholder since the design stage, after the Austrian group initiated the project in 1996.
Originally, Baul Holding Strabag AG wanted to invest in a five-star hotel in Bucharest, and found a site behind Casa Poporului (the parliamentary building) with an unfinished building on it that belonged to ONT Carpati.
After a series of negotiations with ONT, a 55% stake in the hotel was transferred to the Austrians, whilst the rest entered ONT's portfolio. In the following years, ONT sold off part of its shares, and was finally privatised in 1998, whilst the company was bought by Cyprus-based New Marathon for around 3.5 million dollars. Fathi Taher bought ONT's shares and now owns 19% in the hotel.
Christian Ebner remembers that Fathi Taher became a shareholder not long after the hotel was built. "We have known Mr. Taher since before the hotel opened, he was our local expert, because all companies that wish to invest in a foreign country need a local contact."
The main reason why Strabag is now considering giving up the Bucharest hotel is for profit related reasons.
"When it comes to turnover the stake in Marriott is marginal and we derive a very small profit - a few million euros a year (Strabag's profit as majority shareholder stood at 9 million euros in 2007)," explained Ebner, who added that Strabag forecast turnover worth 30 billion euros this year, whilst JW Marriott Bucharest could derive 50 million euros at the most.
The Strabag official did not wish to specify what a "good price" was for the majority stake in Marriott.
At the time of the negotiations, the hotel was appraised by Erste Bank at 130 million euros, but the appraisals considered by those interested in buying, especially Taher, amounted to as much as 200 million euros.
Marriott's sale
In mid-2007, businessman Fathi Taher was in talks with Strabag, the main shareholder, to buy 35% of its shares, but did not settle on a price
Taher could sell his stake to Strabag, whilst the Austrian group could go on to sell to an investment fund
At the time of the negotiations, Erste Bank put the hotel's value at 130 million euros
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