THE value of burgeoning Australian hotel and resort operator Mantra has surged through the billion-dollar mark after French titan Accor lobbed a $1.2 billion buyout bid.
Shares in Mantra rallied 16.4 per cent yesterday after the group declared it had received a takeover offer from Paris-based Accor, which owns a succession of famous hotel brands including Sofitel, Pullman, Novotel, Ibis and Mercure.
But a deal is far from certain, with Mantra’s directors yet to support the bid and other hurdles still to be jumped.
“There is no certainty that an agreement will be reached or that the proposal will be implemented,” Mantra cautioned in a statement to the Australian Securities Exchange.
Mantra has more than 20,000 rooms under management across Australia, New Zealand and Indonesia.
Key Victorian properties include its Lorne resort and a series of hotels in Melbourne: two in Exhibition St, two on Little Bourke St, on Russell St, on St Kilda Rd, in East Melbourne, Southbank, Preston and Tullamarine.
Based in Surfers Paradise, Mantra made headlines last month when it bought the seven-hotel portfolio of the Art Series Hotel Group, based in Melbourne.
The $52.5 million deal for that chain, which was founded by Melbourne’s wealthy Deague family, boosted Mantra’s presence in the luxury sector, handing it four up-market hotels in inner Melbourne, one at Box Hill, and one each in Brisbane and Adelaide.
Accor owns about 4200 hotels worldwide and also has brands including The Sebel and F1. In its statement to the stockmarket, Mantra said Accor was offering $3.96 in cash for each of its shares, and $4.02 if “a potential special dividend” were factored in.
The higher offer values Mantra at $1.195 billion.
Investors piled into the group in the wake of the revelation, boosting its market value to $1.12 billion — a $157.3 million increase.
Accor’s offer is non-bonding, meaning it could simply serve as a launch pad for negotiations.
The group owns hotels around the world, including in the US, Europe, South America, Africa, the Middle East, Asia and Russia.
Mantra joined the ASX in June 2014 and in its first year as a public company was promoted to the ASX 200.
Discussions with Accor were incomplete and any move towards a binding transaction would be subject to various conditions, the group said.
It has granted Accor access to its books for due diligence “to determine if a transaction can be agreed and recommended unanimously by the Mantra board”.
“If any proposal is agreed, the proposal will be subject to regulatory approvals and other conditions to be determined,” Mantra told investors, vowing to keep them informed “in accordance with ... continuous disclosure obligations”.
“At this stage shareholders do not need to take any action in relation to the proposal.”
Mantra said it was using Highbury Partnership as financial adviser and Baker McKenzie as legal adviser to assist in its response.
In the year top June, Mantra’s revenue climbed 13.7 per cent to $689 million, with net profit up 22.7 per cent to $45.6 million.
Originally published as Buyout bid sends Mantra to penthouse