Australian Pub Landlord Sees Surge After Buyout Offer

By Sneha Kumar

(Reuters) – Australian pub landlord Hotel Property Investments surged to a 19-month high on Monday, poised for its best session in one-and-a-half years. This followed a buyout offer from its largest shareholder, valuing the company at A$716.5 million ($478.4 million).

Hotel Property Investments, which owns 58 pub and hotel properties, rejected the A$3.65-per-share offer from Charter Hall Retail REIT, which holds nearly 15% of the firm. The company deemed the offer to be undervalued.

Shares of Hotel Property Investments rose as much as 6.6% to A$3.71, exceeding the offer price and suggesting shareholders are looking for a better deal.

Morningstar analyst Adrian Atkins supported Hotel Property’s decision to reject the offer, asserting there was no urgency for a sale due to the company’s strong financial health. He emphasized that the revenue is stable, backed by long leases and quality pubs.

Charter Hall Retail and its bidding partner, superannuation fund Hostplus, indicated that the offer is fully funded and presents an attractive premium over Hotel Property Investments’s historical trading levels.

Charter Hall Group, the parent company, is Australia’s largest pub owner and operates well-known hotels like Young & Jackson in Melbourne.
($1 = 1.4977 Australian dollars)