Hotel group Mantra didn’t take long to say ‘yes’ to the marriage proposal from French accommodation giant, Accor. On Monday the French company ponied up a $1.2 billion non binding ‘ have a look at this’ offer and won the right to due diligence.
Yesterday morning Mantra announced that the non binding offer was so attractive that it now wanted to make it binding, and it is all over bar the decision of regulators – FIRB for foreign investment clearance and the ACCC for competition concerns which might be a bit tougher to answer for the lucky couple.
The merger would give the combined group about 50,000 rooms or roughly 11% of Australia’s hotel market, and while not a high share, there are some areas of overlap which analysts think the ACCC might want to see removed.
Accor is offering $3.96 per share, which was a 23% premium to Mantra’s last trade before the bid was announced on Monday ( ie.e the last price a week ago Friday).
“Mantra’s board has concluded that the sale of the company at a significant premium to market is an attractive outcome for shareholders,” Mantra Chairman Peter Bush said in a statement.
Under the deal, Mantra may pay out a special dividend of 23.5 cents per share to its shareholders, which would then be deducted from the A$3.96 that Accor has offered.
Mantra’s board urged shareholders to approve the deal.
Mantra shares were steady at $3.87 yesterday, a sign investors are not holding out for a higher bid and expect the deal to go ahead.
The takeover will be via a scheme of arrangement with Mantra shareholders to vote on the offer next March.
