Accor in $920M Mantra bid as tourist boom stokes demand

sydney — France’s Accor has bid A$1.18 billion ($920 million) for Mantra Group Ltd — a deal that would combine the two biggest hotel owners in Australia and seek to capitalise on surging tourism in the country.

Accor, already the biggest hotelier in Australia, offered A$3.96 a share, or a 23 per cent premium to Mantra’s closing price on Friday. The total offer is worth A$4.02 per share if a six-cent final dividend paid in 2017 is included, Mantra said in a statement.

“They haven’t lowballed it, that’s for sure,” said Anthony Porto, portfolio manager at Martin Currie Australia, which owns a stake in Mantra.

A deal would be the second-largest in Australia’s hotel sector, but the industry is quite fragmented and shares in Sydney-listed Mantra surged 17 per cent on Monday as investors bet the deal would have a fair shot at gaining regulatory clearance.

Mantra said it was allowing Accor to conduct due diligence “to determine if a transaction can be agreed and recommended unanimously by the Mantra board.” An Accor spokeswoman had no immediate comment.

Accor’s bid comes as the country’s hoteliers rush to build extra rooms to meet growing demand. The number of visitors to Australia surged 9 per cent in the past financial year to hit a record 7.9 million while spending by international visitors climbed to $40.6 billion — also a record. — Reuters