Hotel group Mantra revives plans to float on ASX

HOTEL group Mantra has resurrected its plans for a float on the Australian Securities Exchange offering 249.5 million shares at $1.80 each to raise $239.1 million.

Last night, Macquarie and UBS sold 132.8m new shares at $1.80 each in a deal that was fully underwritten by the two investment banks who are joint lead managing the float.

The IPO is priced at 12.7 times 2015 forecast earnings with a fully franked yield of 5.5 per cent. The S&P/ASX200 index is currently trading at about 15 times forecast earnings.

Mantra’s prospectus will be lodged tomorrow, the book build will be held on Monday and trading will start on the ASX on June 27.

Mantra called off plans for a float in March, just hours after it slashed the price for its initial public offering by 5 per cent in what was then the second attempt to sell the business, purchased at the peak of the market for $450m by CVC Capital and UBS.

Cooling market sentiment at the time was said to be the decision.

Under Mantra’s current IPO, CVC and UBS are not selling their shares in the IPO and will retain together about a 43 per cent stake.

New shareholders in Mantra will have a 53 per cent stake in the company through the IPO, with company management having about a 4 per cent shareholding.

Mantra operates 111 properties and more than 11,400 rooms across Australia, New Zealand and Indonesia and is second only to Accor locally.

The company’s brands include Mantra, Peppers and BreakFree.

Mantra’s 2013 sales totalled $431m and the company has forecast earnings before interest taxation, depreciation and amortisation in the year to June 30, 2014 of about $63m.

Source:  The Australian - 29th May 2014