Dixon Group sets sights on $300m listing
Melbourne-based pub operator Dixon Hospitality Group is eyeing an aggressive expansion of its business across the east coast of Australia, with an aim to float a $300 million vehicle on the ASX by the end of next year.
The company, which owns leaseholds rather than the freehold property, expects to operate about 30 pubs by the time it pursues an initial public offering, compared to controlling just four hotels last month.
It boosted its holdings to 24 this month after a number of mostly Victorian acquisitions, including a portfolio of 18 venues from the Open Door Pub Company.
The company is led by Michael Dixon, the 30-year old son of outgoing Spotless chief executive Bruce Dixon, who is also involved in the business.
“The size will all depend on a couple of transactions we are targeting over the next six to 12 months. It will be in the vicinity (of $300m) or it could be a bit more,” Michael Dixon said yesterday.
“We are looking to purchase some more within Victoria but also go further up the eastern seaboard, in NSW and Queensland.”
He added that the group was in negotiations to buy the leasehold of an “iconic” pub in Sydney’s Bondi.
The group has short-listed investment bankers to help raise capital for an IPO, with a decision on a single representative to be made shortly.
“It is something that hasn’t been done before. It would be a new player in the (ASX) in that its strictly leasehold,” he said.
“We are not tying any capital into a freehold. If you get scale there is no reason why it can’t work. There is only a number of bigger groups in the (pubs) field. There aren’t many large scale businesses of this type out there.”
Rival company Redcape Hotel Group has considered a float of its gaming focused portfolio, with the aid of banks UBS and JP Morgan.
Trade buyers have also chased that portfolio as float plans were deferred and then reignited after the reporting season.
A spokesman for Redcape said: “We continue to look at opportunities to add pubs to the portfolio through strategic acquisitions where we are confident in our ability to add value to the underlying asset.”
Mr Dixon said that there was a gap in the Sydney hotel market as the food offerings were undeveloped, largely due to a strong reliance on gaming.
Source: The Australian, Greg Brown, 23rd September 2015
Originally published as: Dixon Group sets sights on $300m listing
