ACCC gives green light to $1.2b Mantra-Accor deal
The $1.2 billion bid by AccorHotels for Mantra Group has been given the green light by the regulators, in a move that will create the biggest hotel operator chain in the country.
The Australian Competition and Consumer Commission says that it will not oppose the proposed acquisition of Mantra Group as it operates in a different part of the market to Accor.
The offer is $3.96 cash per share which gives Mantra an implied market capitalisation of $1.182 billion.
AccorHotel's Sofitel Darling Harbour hotel.
''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 ACCC chairman Rod Sims said.
''The combined Accor-Mantra will still compete with other international and national chains, as well as many independent hotel and accommodation providers.''
Mr Sims said the combined group will have a large number of properties in some area, particularly in holiday destinations such as Queensland. But, after a detailed review by the ACCC it does not see any overlap issues.
Paris-based Accor is one of the biggest hotel operators in the world and Mantra is one of the larger hotel chains in the three-star sector.
The deal comes as the Australian hotel sector is undergoing big change with a large amount of new sites being developed. There are five new hotels coming out of the ground in Sydney and two in Melbourne.
AccorHotels, which has been one of the busiest operators in 2017, has opened its Sofitel Sydney at Darling Harbour and will also operate the new MGallery by Sofitel at Vicinity Centres' Chadstone shopping centre in, Melbourne. It is also due to open its new $140 million William Inglis hotel, the MGallery by Sofitel at Sydney's Warwick Farm.
Mantra has been the subject of takeover speculation since March this year when there was a run on its shares, although no bid prevailed. The hotel group was floated at $1.80 per share in June 2014 by private equity group CVC Capital and UBS.
Mantra, based on its latest half year results has 136 properties, which extends to Hawaii and Bali; 18,000 rooms under management and had more than 2.5 million guests per year. It will be a major beneficiary of the upcoming Commonwealth Games on the Gold Coast which start next month.
AccorHotels has also been active with the news last week that it has signed agreements with a group of international investors with a view to selling a majority of the capital of AccorInvest.
Under the terms of the deal, AccorHotels will initially sell 55 per cent of AccorInvest to sovereign funds, being the Public Investment Fund (PIF) and GIC, Institutional Investors, namely Credit Agricole Assurances, Colony NorthStar and Amundi, and other investors.
For AccorHotels, the sale would result in a cash contribution of €4.4 billion ($7 billion), of which some cash will be used to fund the Mantra bid.
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