Accor’s Mantra hotels takeover to face ACCC review

The $1.3 billion takeover of Mantra, which runs Peppers, Mantra and BreakFree properties, would give Accor, best known for brands such as Sofitel and Novotel, a dominant position in some Queensland markets.

The competition regulator reported last week it was “currently monitoring” the deal, adding a “public review will be commenced in due course once certain information is provided by Accor and Mantra”.

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A timeline for submissions and the decision date will be provided at that time, in keeping with Accor’s plans to close out the deal early next year.

Mantra this month entered into a scheme of arrangement with Accor with the board endorsing the French hotelier’s $3.96 per share takeover offer.

At a Morgans conference last week, Mantra chief executive Bob East played down concerns about the offer attracting competition challenges from the ACCC, saying the combined group would have approximately 14% market share.

Mantra also highlights the quality of its Art Series acquisition, which will be completed shortly and generate $7 million in earnings.

“While we consider Accor’s takeover bid does not fully capture the value of the Art Series acquisition, particularly when compared to international peers, Mr East recognised the competitiveness of the Asian market and the benefit larger operators are afforded due to the strength of their brand,” Morgans says.

Other analysts are not worried about the ACCC intervening. Macquarie analysts say that competition issue risk appeared “relatively minor” as the hotel industry is “fragmented and competitive” with the top 10 players holding 44% market share.

Ord Minnett says the ACCC is likely to approve the deal.