TMG Holding signed definitive agreements for the acquisition of a 39% stake with management rights in a sizable portfolio of 7 unique hotels in Cairo، Alexandria، Luxor، and Aswan

Talaat Mostafa Group Holding ("TMG Holding"، "the Group") announced that it is pleased to announce that its hospitality arm ICON، signed definitive agreements for the acquisition of a 39% stake with full management، the stake will reach 51% within a specified period of time in Legacy Hospitality company ("Legacy Hospitality") according to the schedule of the contract  concluded. Legacy Hospitality is a newly established company that owns a unique and sizable portfolio of 7 hotels in Egypt - Sofitel Legend Old Cataract Aswan، Mövenpick Resort Aswan، Sofitel Winter Palace Luxor، Steigenberger Hotel Tahrir، Steigenberger Cecil Hotel Alexandria، Marriott Mena House Cairo، Marriott Omar Khayyam Zamalek، which were previously owned by the Egyptian General Company for Tourism and Hotels ("EGOTH"). Furthermore، Legacy Hospitality is a joint company between TSFE Tourism، Real Estate & Antiquities Sub fund،  and  EGOTH..

The group's growth strategy

 
The final share subscription agreement was signed in the presence of the Prime Minister of the Arab Republic of Egypt – H.E. Dr. Eng. Mostafa Madbouly، the Minister of Planning and Economic Development and Chairman of TSFE - H.E. Dr. Hala Elsaid،  and the Minister of Public Business Sector – H.E. Eng. Mahmoud Esmat، between the Group، represented by its CEO and Managing Director – Mr. Hisham Talaat Moustafa، and EGOTH، represented by its CEO، and the Sovereign Fund of Egypt، represented by CEO – Mr. Ayman Soliman.
This strategic move aligns with the Group’s growth strategy to solidify its position as the leading player in Egypt’s upscale hospitality segment. ICON aims at renovating and upgrading this unique portfolio of landmark hotels alongside with preserving its historical nature، to bring it in line with its existing upscale hospitality projects and create value for shareholders. It will bring ICON’s hotel portfolio to a total of 15 hotels and increase its room base to around 5،000 rooms، inclusive of projects under development and construction.
Importantly، the acquisition is in line with the Group’s strategy to maximize the recurring income activities for the company in the medium-term، boosting its foreign currency resources، as well as creating additional spare liquidity for future dividend pay-outs and/or reinvestment in quality recurring income assets.
The transaction will be valued at US$800 million upon 51% ownership in Legacy Hotels، and the transaction will be financed through ICON internal resources، as well as an US$882.5 million capital increase by a well-known international strategic investor to acquire a minority stake in ICON after the restructuring، with the Group retaining a majority stake.
With the entry of the strategic partner as a shareholder in ICON، the transaction would result in one of the largest foreign direct inflows into Egypt in the last several years. This reflects significant investors’ confidence in ICON’s business model and its growth prospects، as well as continued  appetite for investment in solid companies operating in attractive sectors in Egypt. This transaction is further in line with the government’s policy to promote the role of the private sector in Egypt. 

Hotel revenue

The acquisition of the 7 hotels portfolio is initially expected more than double the ICON Group’s consolidated USD hotel revenues in 2024 to more than USD250 million. This is expected to continue to increase steadily over the coming few years as planned renovations and upgrades of the 7 hotels and the improvements to the commercial strategy together with the opening of the new ICON hotels are concluded.  After the capital increase completion، ICON intends to pay from the proceeds the outstanding USD debt.
The purpose of this investment into Legacy Hospitality is to develop and upgrade these hotels to bring their operational efficiency to higher levels، enabling them to attract a higher quality of tourism to Egypt، leveraging on their unique and historical significance. The upgrades and modernisations will result in increasing their revenues as a function of higher room rates compared to the current levels achieved by these hotels.
Closing of the transaction is subject to fulfilling conditions precedent for financial closure. EFG Hermes had been appointed by the Group as the sole financial advisor for this transaction.