Gold Coast Mantra Group CEO Bob East says $1.2 billion Accor Hotels offer in interests of shareholders

HOW did Gold Coast hotel company Mantra become a $1.2 billion operation overnight? The man behind the tourism powerhouse reveals how his company came to be for sale and when the deal will be done.

CEO Bob East. Photo: Jodie Richter

GOLD Coast hospitality powerhouse Mantra Group is a $1.2 billion company after it confirmed Parisian hotel giant Accor had offered to buy it.

Early yesterday, CEO Bob East and his board sat down at their respective desks for an unscheduled conference call after news leaked they were examining the uninvited, but not unwelcome bid.

FRENCH HOTEL GROUP OFFERS $1.2 BILLION FOR MANTRA

“The business wasn’t for sale, but obviously if parties make an approach then it’s incumbent on the board to act in the best interests of shareholders,” Mr East said.

“Obviously this is something that has presented itself to us — it’s not a situation where were looking for suitors.”

Aerial view of Mantra Group’s Peppers Broadbeach.

The board drafted a statement to the ASX, confirming that Accor was offering $3.96 in cash per share for the company in a deal that would see the country’s two largest hotel operators create a chain of about 300 properties.

“The discussions are incomplete and ... the proposal will be subject to regulatory approvals and other conditions to be determined,” the statement said.

The deal is expected to face scrutiny from both the Foreign Investment Review Board and the Australian Competition and Consumer Commission.

If it proceeds, the deal could be finalised in 2018.

Accor representatives could not be contacted yesterday, so any plans for the 50 Cavill Ave-based headquarters are unknown.

Mantra CEO Bob East is tight-lipped on his future, should the sale to Accor proceed. Picture Glenn Hampson

Mr East declined to discuss his life after Mantra, which he has run for a decade.

He said the sale had nothing to do with any perceived conflict between his role as Tourism Australia chairman.

“It’s completely separate,” he said.

“I accepted the Tourism Australia role before this — I’m not running anything for my career.”

Mantra shares soared 17.6 per cent yesterday to $3.80 at midday and closed up 16.4 per cent at $3.76.

The operator of the Peppers, Mantra and Breakfree hotel brands, the group has acquired 11 new properties in the past year.