The board of listed hotels operator the Mantra Group has approved the sale of the company’s shares to Paris-based Accor Group.
The announcement follows news on Monday that Accor had made an all-cash offer to buy Mantra for $1.2 billion, or $3.96 per share. Shares in Mantra subsequently surged by 20%.
Mantra’s board notified the ASX this morning that it had entered into a binding agreement with AccorHotels, whereby Accor will purchase all of the shares in Mantra at $3.96 per share by way of a Scheme of Arrangement.
Mantra will also have the discretion to pay a special dividend to its shareholders of 23.5 cents per share, which will be deducted from $3.96 sale price.
Already the biggest hotel operator in Australia, the purchase of Mantra will increase Accor’s portfolio 300 hotels and more than 50,000 rooms.
Mantra operates 127 properties across Australian, New Zealand, Indonesia and Hawaii, while AccorHotels operates around 210 properties.
“The cirectors of Mantra unanimously recommend that Mantra shareholders vote in favour of the Scheme, and intend to vote Mantra shares in their control in favour of the Scheme, in each case in the absence of a superior proposal and subject to an independent expert concluding that the Scheme is in the best interests of Mantra shareholders,” the company said in its statement this morning.
The deal will still require Mantra shareholders to sign off, along with approval by the Foreign Investment Review Board and the Australian Competition and Consumer Commission.
“Mantra’s Board has concluded that the sale of the company at a significant premium to market is an attractive outcome for shareholders,” said Peter Bush, Mantra’s Chairman.
“AccorHotels has a global capability and deep skills that will benefit Mantra’s customers and provide opportunities for our team members. The offer represents compelling value and provides an attractive opportunity for shareholders to realise this value.”
A short time ago, Mantra shares were trading at $3.87, unchanged from the previous session’s closing price:
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.