Mantra Group’s board has just revealed (Oct 12) it has approved the proposal from AccorHotels to acquire the company for over AUD$1.3 billion.
The deal, which will see all shares of Mantra acquired for $3.96 per share, will see AccorHotels add 127 hotels to its network across Australia, New Zealand, Indonesia and the United States (Hawaii), taking its network to over 370 hotels in the Australasia region.
“The Board of Directors of Mantra Group Limited is pleased to announce it has entered into a binding agreement with Accor S.A whereby AccorHotels will acquire all of the shares of Mantra at a price of AUD$3.96 cash per share (on a fully diluted basis), including a potential share dividend, by way of a scheme of arrangement,” Mantra Group said in a statement.
“The Directors of Mantra unanimously recommend that Mantra shareholders vote in favour of the Scheme, and intend to vote Mantra shares in their control in favour of the Scheme, in each case in the absence of a superior proposal and subject to an Independent Expert concluding that the Scheme is in the best interest of Mantra shareholders.
“The Scheme is also subject to certain regulatory approvals being met,” the Board said.
The acquisition of Mantra Group continues AccorHotels’ aggressive global expansion which recently saw the company buy Fairmont Raffles to create the world’s largest network of luxury hotels.
AccorHotels Chairman and CEO, Sébastien Bazin, said the company was thrilled with the acquisition of Australia’s second largest hotel chain.
“We are delighted to have come to an agreement to acquire the Mantra Group,” he said. “This operation will underpin our long-term growth in the Asia Pacific region.
“Mantra’s portfolio would offer AccorHotels additional accommodation formats and a strong customer base to complement our successful hotel portfolio in Australia.
“We are confident that the transaction terms are attractive for shareholders of both groups,” Bazin said.
Properties in Mantra’s portfolio range from luxury accommodations and coastal resorts to serviced apartments in city and key leisure destinations, under three key brands: Peppers (28 properties), Mantra (75 properties) and BreakFree (24 properties).
Mantra, which has over 5,500 employees, also manages core accommodation services including guest relations and reception areas, restaurants and bars, conference and function centres, pool and entertainment facilities and offices.
“The AccorHotels offer represents an attractive proposition for Mantra and for our shareholders and the Board unanimously recommends AccorHotels’ proposal,” Mantra Group Chairman, Peter Bush, said.
“AccorHotels is one of the world’s leading hotel operators and we trust that our business will be in good hands,” he said.
“Mantra’s strong expertise in apartments, in particular, and our presence in resort locations are very complementary to the AccorHotels operations in Australia and New Zealand.
“The combined business will be an important part of Australia’s strong and growing tourism market and its customers will benefit from the market leading expertise of both groups,” Bush said.
AccorHotels says its combined geographic footprint with Mantra, together with enhanced distribution and systems, would form a favourable base from which AccorHotels can expand further in the region.
“Mantra’s expertise in apartment management, in particular, will offer a new opportunity for growth,” AccorHotels says.
The acquisition will be accretive to earnings per share in the first year of ownership pre-synergies. AccorHotels will pay AUD$1.3 billion, equivalent to €0.9billion.
“Besides, AccorHotels confirms it is in discussion with potentiall investors in relation to the sale of part of the Share Capital of AccorInvest,” AccorHotels says. “The Group aims at signing an agreement before year-end 2017. At this stage, the Group has no certainty to reach an agreement.”
The transaction is subject to regulatory approvals, including from the Australian Foreign Investment Review Board, the Federal Court of Australia and the Australian Competition and Consumer Commission, as well as the approval of Mantra shareholders and other customary conditions.
It is anticipated that subject to regulatory and shareholder approvals, the transaction should be completed by the end of the first quarter 2018.
UBS is acting as financial adviser, Herbert Smith Freehills is acting as legal adviser and JLL Hotels and Hospitality (M&A) is acting as commercial adviser to Accor S.A. on this transaction.