Australian landlord Hotel Property valued at US$507 million in raised investor group bid

REAL estate firm Charter Hall Retail Reit and pension fund Hostplus have bumped up their bid for Australia’s Hotel Property Investments (HPI), now valuing the pub landlord at US$506.6 million.

Charter Hall and Hostplus, HPI’s top shareholder group with a combined stake of roughly 18 per cent, have raised their offer to A$3.85 (S$3.39) per HPI share they do not already own, from A$3.65.

The new offer is a 2.4 per cent premium to the stock’s closing price on Thursday and is 10.6 per cent higher than its close on Sept 6, a day before its first offer, which HPI rejected.

HPI said it would review the latest proposal, but reaffirmed its stance against selling its portfolio, which comprises 58 venues primarily in South Australia and Queensland, unless presented with a compelling offer.

“I don’t think HPI will take this offer as they are under no pressure to do so, and they will be seeking a premium to the valuation in my opinion,” said Brad Smoling, managing director at Smoling Stockbroking.

Still, HPI’s shares dropped nearly 1 per cent to A$3.72 on the day. They had gained about 8 per cent since the first offer through Thursday.

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Shares of Australian pub landlord Hotel Property jumps after rebuffing of buyout offer

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The company also confirmed its previously announced fiscal 2025 distribution guidance of at least 19.7 Australian cents per share, a 3.7 per cent increase from a year ago, following an A$100 million debt refinancing round.

Charter Hall, which alone has a 15 per cent stake in HPI, has expanded its pub ownership, including through its A$1.68 billion acquisition of ALE Property Group a few years back.

Acquiring HPI would play into its strategy to secure more retail assets while partnering with convenience retailers. REUTERS