Aussie ho­tel giant Mantra agrees to Ac­cor’s buy­out

US$920mil deal will cre­ate com­bined group with about 50,000 rooms

The Star Malaysia - StarBiz - - Foreign News -

SYD­NEY: Aus­tralia’s No. 2 ho­tel com­pany Mantra Group Ltd has agreed to a A$1.18bil (US$920mil) buy­out from larger Ac­cor SA, a deal which would join the coun­try’s top two ho­tel groups at a time when tourism is ris­ing sharply.

The deal would give the com­bined group about 50,000 rooms or about 11% of Aus­tralia’s ho­tel mar­ket, ac­cord­ing to IBISWorld sta­tis­tics.

It comes as Aus­tralia’s hote­liers rush to build more rooms to meet grow­ing de­mand.

France-listed Ac­cor is of­fer­ing A$3.96 per share, a 23% pre­mium to Mantra’s last trade be­fore the bid was an­nounced on Mon­day. The of­fer price is more than dou­ble Mantra’s A$1.80 is­sue price when it listed in 2014.

Shares in Syd­ney-listed Mantra edged up 0.1% by mid-ses­sion to A$3.88 yes­ter­day, indi­cat­ing in­vestors sup­port the deal but are leav­ing open the pos­si­bil­ity it may meet reg­u­la­tory hur­dles.

“It’s within the bounds of fair­ness, given what the shares have done re­cently,” said Noel Web­ster, a port­fo­lio man­ager at BT In­vest­ment Man­age­ment, Mantra’s largest share­holder. “Our first re­ac­tion would be not to block it.”

The merger needed clear­ance from the For­eign In­vest­ment Re­view Board and an­titrust reg­u­la­tor the Aus­tralian Com­pe­ti­tion and Con­sumer Com­mis­sion (ACCC), Mantra said.

The ACCC ex­pected the No. 1 and No. 2 hote­liers to file a “de­tailed sub­mis­sion” about the deal shortly, a spokesman said.

The reg­u­la­tor pre­vi­ously said it would re­view any deal to de­cide whether to open a for­mal in­ves­ti­ga­tion.

The deal would be the sec­ond-big­gest in Aus­tralia’s ho­tel sec­tor, and the largest buy­out of an Aus­tralian en­tity by French in­ter­ests, ac­cord­ing to Thom­son Reuters data.

The num­ber of visi­tors to Aus­tralia surged 9% in the past fi­nan­cial year to hit a record 7.9 mil­lion while spend­ing by in­ter­na­tional visi­tors climbed to US$40.6bil – also a record.

Mantra chair­man Peter Bush said in a state­ment the com­pany’s board was rec­om­mend­ing the deal to share­hold­ers, hav­ing con­cluded that the “sale of the com­pany at a sig­nif­i­cant pre­mium to mar­ket is an at­trac­tive out­come”.

Ac­cor chair­man and chief ex­ec­u­tive of­fi­cer Se­bastien Bazin said the takeover would “un­der­pin our longterm growth in the Asia-Pa­cific re­gion”.

If ap­proved, the merger could put pres­sure on Aus­tralia’s third-largest ho­tel com­pany, Mar­riott In­ter­na­tional.

Mar­riott Aus­tralia and New Zealand vice-pres­i­dent Sean Hunt de­clined to com­ment. — Reuters

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.