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Mantra, AccorHotels sign A$1.18B binding scheme arrangement

Following AccorHotels' takeover proposal, Mantra Group Ltd. entered into a binding agreement with the French hotel group to acquire all Mantra's shares in cash for A$3.96 apiece, via a scheme arrangement.

The bid represents an implied market capitalization of A$1.18 billion and an implied enterprise value of A$1.25 billion for the year ended June 30 for Mantra.

The Australian company will also have the option to pay shareholders a special dividend of up to 23.5 Australian cents per share, to be cut from the A$3.96 headline value.

Mantra's board unanimously recommends that shareholders vote in favor of the scheme in the absence of a superior proposal. The board is backing the bid due to the all-cash offer's certainty, its limited conditions, the per-share offer price equating to high underlying multiples, and it being a 22.6% premium over the company's Oct. 6 closing price.

The scheme's implementation is subject to shareholders' and the Federal Court of Australia's approvals, along with the green light from the Foreign Investment Review Board and the Australian Competition and Consumer Commission.

An independent expert was also appointed by Mantra to determine that the scheme is in the best interest of its shareholders. Mantra has tasked Highbury Partnership Pty. Ltd. as financial adviser and Baker McKenzie and Hogan Lovells as legal advisers for the transaction.

Results of the independent expert's report, details of the scheme meeting and reasons behind the directors' recommendation will be mailed in February 2018 to Mantra shareholders, who can vote on the proposal in a meeting in March 2018.

Mantra confirmed scheme arrangement talks with AccorHotels on Oct. 9, with a deal made binding and signed Oct. 12.