Mantra Group part of CVC sell up
The Mantra Group, which private equity firm CVC Asia Pacific and investment bank UBS inherited amid the spectacular $2.5 billion collapse of the Gold Coast-based property group MFS in 2008,
is expected to be officially placed on the market in the next month, with a price tag of at least $600 million.
CVC’s key Australian asset Nine Entertainment Co, is currently considering the sales of ticketing arm Ticketek, Allphones Arena and magazines business ACP Magazines in a bid to reduce the burden of $2.7 billion in debt refinancing, due February 2013. CVC also has a 49.9% stake in ASX-listed Jetset Travelworld.
UBS, which owns a 40% stake in Mantra Group, is expected to be named as adviser on the transaction.
Mantra Group owns more than 130 hotels and resorts in Australia and New Zealand under the brands Peppers, Mantra and Breakfree. The group generated total revenue of $429 million in fiscal 2011.
Mantra, the second largest accommodation operator within Australia, confirmed it has received enquiries from parties interested in investing in the accommodation giant.
Mantra chief executive Bob East said, “The company has had a number of shareholders. The management side, who are minor shareholders, are sticking around and if we have a change of share ownership that does not worry us,” he said.
“Mantra Group is consistently forecasting ahead of market trends in most CBD and regional locations and well placed for continued success throughout 2012,” Mr East said. “Our brands are more recognisable with travellers than ever before and there has been a significant increase in interest from owners and developers appointing Mantra Group as their preferred operator, a reflection on the status of our brands and our credibility within the accommodation sector across Australia and New Zealand.
“There is no foreseeable impact on the current operational team or management of the business should change of shareholder take place.”
Mr East said the portfolio was performing well, given 70% of its income was derived from city hotels, which are benefiting from the strong corporate market, and not leisure resorts, which are struggling amid the downturn in domestic tourism.
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