France's Accor lobs $1.2b offer for Australian hotel group
French-based Accor hotel group has lobbed a $1.2 billion takeover offer for Mantra Group, Australia’s second-largest hotel operator in the small to medium asset sector.
Its ends speculation that Mantra is in play, which started a year ago when there was a run on its shares.
The indicative and non-binding proposal from Accor is pitched at $3.96 cash a share, or $4.02 a share including the 6¢ final dividend – a 23 per cent premium to Mantra’s closing price of $3.23 on Friday. It values the business at $1.17 billion.
Mantra floated at $1.80 in June 2014. It owns and operates more than 125 properties and in excess of 20,000 rooms across Australia, Indonesia and Hawaii under the Mantra, Peppers and Breakfree brands.
Mantra, led by chief executive Bob East, has granted Accor access to due diligence to determine if a transaction can be agreed and recommended unanimously by the board.
In a statement to the ASX on Monday, Mantra management said the discussions were incomplete and any entry by the parties into a binding agreement remained subject to a number of conditions, including the approval of both the Mantra and Accor boards.
“If any proposal is agreed, the proposal will be subject to regulatory approvals and other conditions to be determined,” the statement said.
“There is no certainty that an agreement will be reached or that the proposal will be implemented.
“Mantra will keep investors informed in accordance with its continuous disclosure obligations. At this stage, shareholders do not need to take any action in relation to the proposal.”
Mantra has retained Highbury Partnership as financial adviser and Baker McKenzie as legal adviser.
Accor is one of the largest hotel operators in the world. In Australia, it operates the Sofitel, Novotel, Grand Mercure, Mercure and IBIS brands. Its newest asset is the $500 million Sofitel Darling Harbour, which opened last week and already has 60 per cent occupancy.
