Mantra confirms rumours on Accor takeover proposal

Two buildings shake their hands

Speculation over a potential takeover involving Accor and Mantra Group has reached tipping point, as Mantra made a public statement this morning.

According to The Australian, there’s been a lot of gossip about Accor in negotiations to buy Mantra Group, with Accor rumoured to be in exclusive due diligence to purchase the hotel group.

But this morning Mantra released a statement to the stock exchange regarding “recent press speculation”, confirming the rumours.

It stated, “Mantra confirms it has received an indicative and non-binding proposal from Accor in relation to a potential control transaction.”

It added the suggested proposal would be implemented by way of a Mantra scheme of arrangement, involving a $3.96 cash per share agreement, being $4.02 per share less than the final FY17 dividend that has already been paid.

“Mantra has granted Accor access to due diligence to determine if a transaction can be agreed and recommended unanimously by the Mantra Board,” it added.

“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.

“There is no certainty that an agreement will be reached or that the proposal will be implemented.”

Accor, the global hotel chain that owns brands such as Mercure and Novotel, is reported to have JLL’s hotel division working on its purchase, while Mantra confirmed that Highbury Partnership is working as Mantra’s financial adviser, and Baker McKenzie as legal adviser “to assist it in responding to the Proposal”.

According to The Australian, Mantra listed itself on the stock exchange in 2014 with a market value of $449 million, and now it’s worth $960 million.

Mantra defines itself as being the biggest Aussie-based hotel and resort company, and boasts 20,000 rooms or so, spanning Australia and NZ, as well as Indonesia.

In August this year, it bought The Art Series Hotel to add some quirky flavour into its portfolio, scooping the company for $52.5 million. Its net profit for the 2017 financial year was also up 14.2 per cent on 2016, reaching a $47.2 million net profit.

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