Mantra takeover by Accor given the go-ahead by ACCC
Written on the 8 March 2018 by Ben Hall
The competition watchdog has given the green light for the proposed $1.2 billion acquisition of Mantra Group Limited (ASX: MTR) by French giant Accor.
Accor made its bid for Mantra last October, which was unanimously accepted by the Mantra board three days later, however the planned deal has been subject to approval by the Australian Competition and Consumer Commission (ACCC).
Accor's business is mainly focused on hotel-style accommodation and its brands include Sofitel, Novotel, Mercure and ibis. Mantra's focus is on serviced apartments, which it offers through its Peppers, Art Series, Mantra and Breakfree brands.
"The combined Accor-Mantra will still compete with other international and national hotel chains, as well as many independent hotels and accommodation providers," ACCC chairman Rod Sims says.
"The combined Accor-Mantra will have a large number of properties in some areas, particularly in certain holiday destinations in Queensland.
"However, in each case and after a detailed review the ACCC has found that there are also sufficient other options nearby for visitors which will provide competition to Accor-Mantra."
Mantra shareholders will now vote on the takeover at a meeting expected to be held later this month.
Accor is part of one of the world's largest hotel and tourism groups, AccorHotels. AccorHotels is listed on the French Stock Exchange. In Australia, Accor has a network of over 200 hotels and offers a range of short-term accommodation options.
Mantra is Australia's second largest accommodation provider and operates 136 properties with more than 24,000 rooms across Australia, New Zealand, Indonesia and Hawaii.
Both Accor and Mantra also supply hotel management and related services to property owners and developers.
Last month Mantra recorded record revenue but its first half profit and earnings dropped on the back of sluggish performance in Hawaii, Perth and Melbourne.
It reported record first half revenue to December 31, 2017, of $366.2 million which was an increase of $10.1 million or 2.8 per cent on the prior corresponding period.
But net profit after tax fell by 6.3 per cent to $27.6 million as it encountered "tougher than expected trading conditions in some regions".
Business News Australia
Author: Ben Hall