New player AG&E in $95m pubs splurge

The Beverly Hills Hotel in Sydney's St George district is one of the properties in the AG&E portfolio.

A new entrant has emerged in the busy listed pub market with Australian Gaming and Entertainment (AG&E) unveiling a portfolio of five properties in western Sydney, valued at about $95 million.

The group is undertaking a float through CIMB and Wilson HTM to raise about $80 million from private and institutional investors. The IPO is offering 80 million shares at $1 each, and at that price it is 12.6 times the company's forecast 2015 net profit per share.

The hotels are the Croydon Park Hotel, the Canley Heights Hotel, the Beverly Hills Hotel, the Wentworthville Hotel, and the Wiley Park Hotel.

AG&E will be an owner operator of the pubs which were bought from Lewis Hotels Group for about $95 million.

To run the business the group has appointed the long-time gaming executive Heather Scheibenstock to lead the venture.

Ms Scheibenstock was previously the general manager at both Star Casino and Jupiters Casino. John Thomas is chief operating officer and David Shaw is chief financial officer and the non-executive chairman is Bill Brown.

Once floated, AG&E will join the Redcape Hotel Group spin off, Hotel Property Investments on the ASX, and possibly the proposed $250 million Australian Pub Fund, backed by Mark Carnegie and businessmen John Singelton and Geoff Dixon.

John Musca, National Director Jones Lang LaSalle Hotels is believed to have managed the transaction but was unavailable for comment.

The group said the hotels were chosen in the high population growth corridor of western Sydney, as they are near transport infrastructure and commercial and retail hubs.

AG&E is being formed against the backdrop of an active pub sector where more than $60 million of pubs have changed hands in the past few months.

There are three significant ones currently for sale including the Lord Dudley at Woolahra, through Mike Wheatley at Knight Frank.

The Cambridge Tavern at Fairfield, Sydney is also on the market, with a price expectation of more than $20 million.

The sale by the private Melbourne-based Aussie Leisure Group, is for the freehold as it has a lease until 2058 to the Woolworths hotel arm, ALH.

The Cambridge Tavern last traded as a freehold going concern in 2007 for about $45 million and then completed the lease with ALH.

Aussie Leisure Group is also sellling the Tea Gardens hotel at Bondi Junction, worth about $40 million.