PPHE Hotel Group Limited Announces Acquisition Of Remaining Interests In Four Hotels In The Netherlands

PPHE Hotel Group is pleased to announce that it has agreed to acquire the remaining 50% interests in, and related loans to, Park Plaza Amsterdam Airport, Park Plaza Victoria Amsterdam, Park Plaza Utrecht and art'otel amsterdam project (together the "Hotels") which the Company does not currently own, from a subsidiary of Elbit Imaging Limited ("Elbit"), for a consideration of €26.5 million.

The Hotels are currently operated under the direction of Park Plaza Hotels Europe B.V..

The consideration for the acquisition comprises:

a) €23.0 million in cash;

b) the issue of 700,000 shares in the capital of the Company (the "Consideration Shares"); and

c) a deferred consideration, payable on the fourth anniversary of the transfer of the shares under the terms of the agreement (the "Transfer"), equal to 700,000 multiplied by the shortfall of the closing price of the Company's shares on the date of Transfer below £4.17, subject to certain reductions set out in the agreement (the "Deferred Consideration").

Under the terms of the agreement, the Transfer must occur by no later than 31 May 2012, subject to satisfaction of certain conditions. The Company retains the right to terminate the agreement prior to the Transfer (including if financing of the cash consideration or relevant bank consents shall have not been obtained).

Elbit will be subject to a lock-up on disposal of the Consideration Shares until the earlier of (i) the admission of the Company's shares to the premium segment of the main market of the LSE, and (ii) 30 June 2012.

The Company has been granted the option to buyback all of the Consideration Shares which Elbit may own from time to time at a price of £4.17 per share. If the Company elects to exercise this option, the balance of the Deferred Consideration will be reduced by an amount equal to the shortfall of the closing price of the Company's shares on the date of Transfer below £4.17 multiplied by the number of shares bought back. Any such exercise would be subject to shareholder approval under Guernsey law.

Based on the most recent valuation of the Hotels from June 2011, Elbit's interest to be acquired has a value of €88m. As at 31 March 2012, Elbit's interest to be acquired is expected to have bank debt of € 57million.

Further announcements on the acquisition will follow in due course.

Boris Ivesha, President and Chief Executive Officer of PPHE Hotel Group, commented: "We are delighted to announce this transaction which will result in PPHE Hotel Group owning 100 per cent of Park Plaza Victoria Amsterdam, Park Plaza Utrecht, Park Plaza Amsterdam Airport and art'otel amsterdam which is currently under construction. Our experienced management team remains as always focused on delivering great facilities and service to our customers."