Cape's premier resort "has been a very profitable investment "
In a PR release today, American Financial Group, Inc. announced that its 81%-owned subsidiary, Great American Financial Resources, Inc. (GAFRI) has reached an agreement to sell Chatham Bars Inn, its resort-hotel property located in Chatham, Massachusetts, for $166 million.
At this ratio the entire property is estimated to be valued at over $200 million.
The sale, which is subject to customary closing conditions, is expected to close in the second quarter of 2006. AFG expects to recognize an after-tax gain of approximately $27-$29 million ($0.34-$.36 per share), after transaction costs, the write-off of certain deferred annuity acquisition costs associated with the gain recognition and minority interest. The buyer's name is not being released.
One of the comments (below) on this story suggest that it's not a coincidence that the seller is a large insurance company.
We have all read stories recently about insurance companies refusing to cover cape properties out of fear of the cost due to increased hurricane activites, and the commenter suggests selling the property is not a coincidence.
If this were to be the case, it the seller a mistake, because unlike much of the Cape Cod shorefront facing Nantucket Sound and Buzzards Bay, the Chatham Bars Inn sits on forty-foot bluff abovehigh the harbor which itself is protected by the barrier beach two miles east.
Operated property for $15M 13 years ago, spent $50M improving it
Great American Financial Resources (GAFRI) has owned and operated the hotel since buying it 1993 for $15 miillion.
The release went on to state that Craig Lindner, AFG's Co-Chief Executive Officer and GAFRI's CEO, commented, "Chatham Bars Inn is one of the most unique hotel properties in the United States and has been a very profitable investment for us. This sale demonstrates the strength of our investment management operation. This sale will provide additional capital to be utilized to grow GAFRI's core insurance operations organically and through acquisitions."
According to a story today in the Cape Cod Chronicle
Executive Vice President Mark F. Meuthing declined to identify the buyer. He said the company had been advertising the property “on a very limited basis” and received an acceptable offer recently... Meuthing said about $50 million has been invested in the inn by Great American, an insurance holding company with about $12 billion in assets.
Through the operations of the Great American Insurance Group, AFG is engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses, and in the sale of retirement annuities, supplemental insurance and life products.
GAFRI is a Cincinnati-based insurance holding company with $12 billion in assets. The Company's subsidiaries include Great American Life Insurance Company, Annuity Investors Life Insurance Company, United Teacher Associates Insurance Company (headquartered in Austin, Texas) and Loyal American Life Insurance Company. Through these companies, GAFRI markets traditional fixed, indexed and variable annuities and a variety of supplemental insurance products.