Listed hotels operator Mantra Group, Australia’s second-biggest hotels business, has received a $1.2 billion non-binding offer from the Paris-based Accor Group.
In an announcement to the ASX this morning, Mantra said it had received an indicative all-cash bid of $3.96 per share, “being $4.02 per share less the final FY17 dividend that has already been paid, and including a potential special dividend”.
That’s a significant markup from Mantra’s closing price on Friday of $3.23 per share.
Mantra shares went into a trading halt this morning, and upon resuming trade a short time ago the company’s stock price shot up by almost 17%:
Mantra said that it has allowed Accor to conduct due diligence in order to determine whether a final offer can be made, and subsequently recommended by the Mantra board.
Accor is Australia’s largest hotel operator and a merger between the two companies would see the establishment of a giant company with more than 300 hotels under its umbrella.
“The discussions are incomplete and any entry by the parties into binding transaction documents remains subject to a number of conditions, including (without limitation) the approval of both the Mantra and Accor Boards and agreement on documentation,” Mantra said in its statement.
“If any Proposal is agreed, the Proposal will be subject to regulatory approvals and other conditions to be determined. There is no certainty that an agreement will be reached or that the Proposal will be implemented.”
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.