AccorHotels places $1.2b bid for Mantra Hotels in Australia

AccorHotels places $1.2b bid for Mantra Hotels in Australia

AccorHotels has made a non-binding $1.2 billion takeover offer for Mantra Group, Australia’s second-largest hotel operator.

French-based Accor is already the largest hotel operator in the country.

A merger of the two biggest accommodation providers would create a local hotel giant with a national portfolio of more than 300 hotels.

These would be spready across more than a dozen brands and control in excess of 50,000 rooms.

If the deal were to complete, it would create a company about five times bigger than its nearest competitor, franchisor Choice Hotels.

ADVERTISEMENT

There had been speculation in March this year international operators such as Marriott, InterContinental and Hyatt might have been interested in acquiring the chain.

However, no bid emerged.

The indicative and non-binding proposal from Accor pitched at $3.96 cash a share, or $4.02 a share including the 6¢ final dividend.

This is a 23 per cent premium to Mantra’s closing price of $3.23 on Friday.

It values the business at $1.17 billion.

Mantra was floated at $1.80 in June 2014 by CVC and UBS.

It owns and operates more than 125 properties and in excess of 20,000 rooms across Australia, Indonesia and Hawaii under the Mantra, Peppers and Breakfree brands.

Accor is one of the largest hotel operators in the world with 4,200 hotels.

Mantra, led by chief executive Bob East, has granted Accor access to due diligence to determine if a transaction can be agreed and recommended unanimously by the board.

In a statement, Mantra management said the discussions were incomplete and any entry by the parties into a binding agreement remained subject to a number of conditions.

These include the approval of both the Mantra and Accor boards.

“If any proposal is agreed, the proposal will be subject to regulatory approvals and other conditions to be determined,” the statement said.

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