Mantra shares climbed as much as 18% in Australian trade after it received the takeover offer © Reuters
Accor, Europe’s largest hotelier by room numbers, has offered A$1.2bn ($931m) for 100 per cent of Australian hotel operator Mantra Group, to gain exposure to a travel market with surging Chinese growth.
Shares in Mantra climbed as much as 18 per cent in Australian trade on Monday to a 16-month high after it confirmed it had received the non-binding takeover offer.
The company said it received an offer of A$3.96 cash per share for 293.7m shares from Accor, or A$4.02 per share if Mantra’s final dividend from the 2017 financial year is included.
The offer represented a 23 per cent premium on Mantra’s closing price on Friday.
Mantra operates 128 properties mainly in Australia and also has businesses in New Zealand, Indonesia and Hawaii. Mantra does not own any of the properties but manages the hotel operations through leasing and management letting rights.
Accor, with properties across nearly 100 countries, owns hotel brands such as Pullman and Sofitel. It has already bought brands such as Fairmont, Raffles, Swissôtel and Onefinestay, the UK-based luxury home rentals site.
Asia Pacific is the largest by revenues of Accor’s six operating regions, and also the fastest growing. In the first six months of the year, Asia-Pacific’s like-for-like revenues in hotel services grew 9.3 per cent year-on-year to €225m, outperforming the group’s global 6 per cent growth for the same period.
“Accor is already market leader in Australia and wants to consolidate its position,” said Najet El Kassir, an analyst at Berenberg. “This deal seems to make strategic sense.”
The acquisition would help Accor expand beyond its slower-growing home market of France, where it is the country’s largest hotel operator, and tap into increasing inbound tourism in Australia. In the 12 months to the end of June the number of international visitors to Australia grew 8.7 per cent to 7.9m, according to the Australian government.
Australia has been one of the top beneficiaries of the global boom in Chinese tourism in recent years, and the Mantra deal capitalises on that trend.
“Australia represents an attractive market for international operators given the country’s appeal as a travel destination, particularly with regards to regions experiencing strong growth in outbound tourism such as China,” according to a note on the deal from Macquarie analyst Shaun Weick.
Australia was the top destination for Chinese overseas travellers in 2017, according to CLSA, the Hong Kong-based brokerage. Second only to New Zealand in the number of inbound tourists to Australia, 1.19m Chinese people visited Australia in 2016, or 15 per cent of total tourists, according to the brokerage.
Mantra has opened its books to Accor but said discussions were ongoing and that any deal was subject to shareholder and regulatory approval.