MANTRA CONFIRMS $1.2B TAKEOVER BID, GOES INTO TRADING HALT

Written on the 9 October 2017 by Ben Hall

MANTRA CONFIRMS $1.2B TAKEOVER BID, GOES INTO TRADING HALT

Mantra Group (ASX: MTR) has entered into a trading halt and has confirmed it received a $1.2 billion takeover bid from French hotel giant Accor.

The Gold Coast-based company released a statement to the ASX early on Monday confirming it had granted Accor access to due diligence to buy Australia's largest listed hotel and resort operator.

"Mantra confirms it has received an indicative and non-binding proposal from Accor in relation to a potential control transaction to be implemented by way of a Mantra scheme of arrangement," the statement says.

"Mantra has granted Accor access to due diligence to determine if a transaction can be agreed and recommended unanimously by the Mantra board."

The Accor offer is $3.96 per share in cash. MTR shares were at $3.23 when it went into the trading halt. When trading resumed on Monday, shares surged 18 per cent to $3.78 at around 1pm (AEST). 

"The discussions are incomplete and any entry by the parties into binding transaction documents remains subject to a number of conditions, including (without limitation) the approval of both the Mantra and Accor boards and agreement on documentation," the company says.


Mantra also points out that if the proposal is accepted and agreed, it will be subject to regulatory approval and there is no certainty that an agreement will be reached or that the proposal will be implemented.

It has retained Highbury Partnership as its defence advisor and Baker McKenzie as its legal adviser.

Mantra Group operates the Mantra, Peppers and Breakfree brands with more than 125 properties in Australia, New Zealand, Bali and Hawaii.

Rumours began circulating within the hotel industry over the weekend that Accor, which owns the Ibis, Mercure and Novotel hotel brands, was in exclusive due diligence to buy Mantra, and that JLL's hotel division was working on the transaction.

The company has been the subject of takeover speculation for the past six months and Mantra has been linked to approaches by the Marriott Group, and other potential buyers including the InterContinental Hotel and Hyatt groups along with Chinese-based hotel operators HNA and the Nanshan Group.

Mantra Group lifted its FY17 underlying net profit after tax by 14.2 per cent to $47.2 as six new properties were added to its network during the 2017 financial year to June.

However, it came in below market guidance of between $48.5 million and $52.5 million as its Gold Coast properties were impacted by lower occupancy because of the Dreamworld tragedy last October in which four people were killed on the Thunder Rapids ride.
 

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Author: Ben Hall

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