Pub owner and fund manager has his eye on an ASX listing
A trio of investors has plans to list their Lion Hotel chain on the Australian Stock Exchange.
The investors behind the purchase of the Lion Hotel plan to acquire 15 more properties into the fund in the next year before listing the fund on the ASX.
Behind the Adelaide-based company is Duxton Asset Management founder Ed Peter, which owns the Crafers Hotel and the Uraidla Hotel and with Martin Palmer and Brett Matthews. The trio purchased the Lion Hotel as the cornerstone asset in a fund worth an initial $40 million.
The recent reopening of the Lion Hotel in Adelaide post lockdown is expected to play a major role in the state’s economic recovery.
The fund expects to raise approximately $25 million in new capital to purchase between 10-15 pubs across metropolitan and regional South Australia over the next year.
The fund’s longer-term ambition is to be a top three pub owner nationally, by de-fragmenting the pub industry and creating synergies in purchasing, staff and marketing from building a critical mass of assets.
The fund already owns 19 venues.
“You start sharing your chefs, your staffing, your purchasing,’’ Mr Peter told the Adelaide Advertiser.
“We are looking to build long-term relationships with suppliers so people can count on us.
“Then we don’t have to charge more for better quality, our customers get a better price, we get a fair price and our suppliers get a fair price.
“Our advantage is that quality edge.”
The intent is to purchase freehold and leasehold pubs with a SA market focus, that includes about 620 venues.
“At this point there’s no reason to leave SA,’’ Peter said.
“And we’re mostly focused on SA investors. The goal is to IPO within four years.”
Peter believes the fund makes for an attractive investment as assets such as these are rare in the market.
“Pubs tend to trade reasonably well in a recession, they tend to trade reasonably well if we get an inflationary environment, and they tend to pay off really good dividends.”
Funds raised will be used to buy venues, with Peter expecting full financial year dividends to reach 9-11 per cent.
Irit Jackson, 3rd November 2020
