Lantern Group to sell hotels
The Lantern Hotel Group is planning to sell the remaining pubs in its portfolio.
With the Sydney landlord set to make a profit of $100 million on the sale, the proceeds are to be returned to shareholders.
It means the real estate market for Sydney hotel is likely to hot up coming on top of the $700m Redcape portfolio, which is also on the market.
Certainly there’s an appetite for inner city pubs with Iris Capital spending more than $15 million last week buying the Columbian Hotel on Oxford Street, a price well above market expectations.
In its statement to the ASX, the Lantern Group said it was seeking shareholder approval for the sale of the pubs and the return of funds to shareholders at next month’s annual general meeting.
“The Lantern board has formed the view that it would be in the best interests of the group to obtain the flexibility of undertaking an orderly sell down of the group’s remaining hotel properties (including all non-core and core hotels),” the company said.
There are six Sydney hotels in the group’s core portfolio: the Ambarvale Hotel in the south of Sydney, the inner-city Crown Hotel in Surry Hills, Five Dock Hotel at Five Dock, the General Gordon Hotel in Sydenham, the Uncle Bucks Hotel at Mount Druitt in the west and the Waterworks Hotel in southeastern Botany
In his letter to shareholders, Lantern chairman Graeme Campbell said these properties are “highly sought-after gaming-led hotels with considerable upside potential and therefore may achieve sale values well above book value”.
"You may receive cash distributions in excess of the ASX trading price in the event a successful sell down of the properties is achieved."
Lantern chief executive John Osborne said the group hoped to make good money on the sale.
"Our non-core pubs have sold on average 14 per cent above book value, and we hope that will be case for the others," Osborne told the Australian Financial Review.
by Leon Gettler, September 20th 2016
