This article is from the Australian Property Journal archive
THE landscape of Australia’s hotel industry has been shaken up by French giant Accor’s $1.2 billion takeover of Mantra Group, giving Accor the key to 50,000 rooms across Australia.
Mantra shareholders and several bodies still need to sign off on the merger, but the group’s board announced yesterday it had entered into a binding agreement that will see Accor acquire all shares at $3.96, potentially plus a special dividend.
The result will be a business with more than 300 hotels and 50,000 rooms, and bring together almost 15 brands.
The deal will also need to be ticked off by the Foreign Investment Review Board, the Australian Competition and Consumer Commission and the Federal Court.
Accor would pay $1.3 billion if approved, with the cash consideration representing a $1.182 billion implied market capitalisation
Mantra’s confirmation earlier in the week that a deal was in the works saw it become the best-performing stock on the ASX on Monday. Having closed at $3.23 on Friday, Mantra closed at $3.76, and then at $3.87 on Wednesday ahead of yesterday morning’s ASX announcement.
Mantra has more than 125 properties and 20,000 rooms across its Mantra, Peppers and Breakfree brands through Australia, Indonesia and Hawaii, and in August acquired the Art Series hotel chain for $52.5 million, adding 1,000 rooms and seven boutique hotels to its portfolio.
Paris-based Accor operates several brands throughout Australia, including Sofitel, Novotel, IBIS, Mercure and Grand Mercure.
It opened the $500 million, 590-room Sofitel Darling Harbour luxury hotel last week.
Mantra shareholders are expected to be able to vote on the scheme in March.
The group’s chairman, Peter Bush, said the board had concluded that the sale of the company at a significant premium to market was an attractive outcome for shareholders.
“After careful consideration, the board believes that the offer price of $3.96 cash per share recognises the strategic value of our business and our success in becoming a leading accommodation provider. The offer represents compelling value and provides an attractive opportunity for shareholders to realise this value,” he said.
AccorHotels chairman and chief executive officer, Sebastien Bazin said, “We have long admired the Mantra business, both in respect of its brands and properties as well as its people and processes. We will be looking to bring together the best of both companies to provide an enhanced experience for our customers and employees in what is an exciting period of growth of the industry in Australia and New Zealand.”
Australian Property Journal