November 1, 2023 – One of the largest transactions in the Croatian hotel sector is currently taking place in the south. It will put Croatia on the map of the strongest players in the investment world for the first time. The American company Blackstone, the world’s largest private equity fund, is the most likely new owner of the tourist company Suncani Hvar, i.e. the most likely winner in the negotiation process, in which there are reportedly two other potential buyers.
The information is, emphasizes Lider, still unofficial and has yet to be officially confirmed by the participants of the transaction, which is about to be completed. It will be extremely important not only for the company and the destination, but also for the entire island of Hvar and the south of Croatia. The area is crying out for a serious investor who will use the potential of the microregion.
There have been rumors about the sale of Suncani Hvar for the last few months, since the Czech fund CPI Property Group of Radovan Vitek, who took over Suncani Hvar in 2014, announced the offer on the market through the usual channels. There were reportedly a number of serious offers from strong institutional players on the table.
“This transaction is important not only in the context of this company, but has a much wider significance, as it finally puts Croatia on the map for the largest global investment funds that come to regulated markets and have high demands. Such players drag others as well. It is a process that is starting now, and we can use it very well. At the same time, Hvar has the opportunity to become equivalent to the Italian Amalfi Coast, for example. For that, they need a player who, like Maistra in Rovinj, will improve the entire destination and attract others to get involved in that development process”, says the source from the sector.
Although sources warn that things can change in such processes, Blackstone is currently listed as the most likely buyer of Suncani Hvar. According to the Fund’s corporate website, they are the largest private equity fund in the world with a trillion dollars under management, and their portfolio includes more than 12,600 properties and more than 230 companies. This allows them to invest in dynamic sectors positioned for long-term growth. Suncani Hvar gives them exactly such an investment opportunity, which may have received an initial boost from the CPI in the last nine years of investment, but it was still not enough for the transformation that is needed.
The seller was also aware of this, and Vitek’s team found themselves at a turning point. To invest in a business that is not the most important in their portfolio, or to retire. Apparently, the hotel sector makes up only five percent of CPI’s portfolio, whose total asset value is around 23 billion euros, and Suncani Hvar represents less than one percent of the portfolio.
In the portfolio of Suncani Hvar, there are seven three- to five-star hotels and a camp. The facilities receive about 2,000 guests a day, and they employ about 700 people during the tourist season, making them the largest employer on the island. The CPI Group has so far invested around 40 million euros in Suncani Hvar, starting with the renovation of the Pharos Hotel in 2016, and their greatest achievement was the opening of the first five-star hotel on the island of Hvar, the Palace Elisabeth Hotel in 2019.
According to data from Poslovna Hrvatska, last year, the company achieved a total annual income of 31.8 million euros, with a net result of operations in the amount of 5.7 million euros, and a net margin of 17.97 percent. After the pandemic, guests from distant markets returned this year, and after the last season, which was very good, this summer they performed the best in the history of the company – as the board president, Gordana Tomičić, recently shared in the media.
