Industry Update
Press Release19 March 2015

Mantra Group Announces Acquisition of Outrigger's Australia Properties

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Mantra Group

Mantra Group Limited ("Mantra Group") is pleased to announce that it has entered into an agreement to acquire Outrigger Hotels & Resorts Australia Pty Ltd ("Outrigger") for $29.5 million, subject to customary completion adjustments and conditions ("Outrigger Acquisition").

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As a result, Mantra Group is today launching a fully underwritten institutional placement ("the Placement") to raise approximately $50 million to assist in funding the Outrigger Acquisition as well as providing Mantra Group with additional capital to fund identified pipeline opportunities. Mantra Group will also offer all existing eligible shareholders in Australia and New Zealand the opportunity to acquire additional shares (up to a fixed amount) via a non-underwritten Share Purchase Plan (together with the Placement, "the Equity Raising").

A copy of the investor presentation relating to the Outrigger Acquisition and the Equity Raising has been lodged separately with ASX (ASX code: MTR).

Outrigger Acquisition
Mantra Group, via a wholly owned subsidiary, has agreed to acquire all of the issued shares in Outrigger.

Outrigger operates 4 resort properties in Australia:

  • Outrigger Surfers Paradise;
  • Outrigger Twin Towns Resorts, Coolangatta;
  • Outrigger Little Hastings Street Resort & Spa, Noosa; and
  • Boathouse Apartments by Outrigger Airlie Beach.

These large-scale properties are located in some of Australia's key holiday destinations, where Mantra Group has a long-standing and high performing presence. Each property offers high quality resort facilities and the transaction presents the unique opportunity for Mantra Group to increase its footprint across 4 key locations – in a single transaction.

Comprising a total of 984 keys under management, plus freehold title to Managers Lot real estate (comprising restaurants, conference facilities and other common areas), the Outrigger Acquisition presents Mantra Group with a significant investment opportunity, and is aligned with Mantra Group's growth strategy to deliver shareholder value.

The impact of the Outrigger Acquisition and today's Placement is expected to be accretive to EPS in FY16. Settlement of the Outrigger Acquisition is expected to complete by June 2015, subject to closing conditions customary for an acquisition of this nature.

Mantra Group's CEO, Mr Bob East, said: "The Outrigger Acquisition is a natural fit for Mantra Group, extending the Group's footprint in key leisure destinations."

"This acquisition is complementary to our existing portfolio and, together with future pipeline growth initiatives, is expected to supplement Mantra Group's strong organic growth with incremental earnings. We look forward to working with the owners, guests and team members to make the transition as smooth as possible" Mr Bob East said.

Institutional Placement
Mantra Group has launched a fully underwritten placement to qualified and sophisticated institutional investors to raise approximately $50 million through the issue of approximately 16.4 million additional shares (the "Placement Shares") to assist funding of the Outrigger Acquisition, as well as providing Mantra Group with additional capital to fund pipeline opportunities.

The Placement Shares have been underwritten by Macquarie Capital (Australia) Limited and UBS AG, Australia Branch at a floor of $3.05 per share ("Underwritten Price"), which represents a 5.9% discount to the last closing share price on 18 March 2015. The price at which shares will be issued to investors under the Placement ("Placement Price") will be determined under a bookbuild which is expected to be completed today.

The Placement Shares will represent approximately 6.2% of Mantra Group's issued share capital after the Placement has been completed (excluding any shares issued under the Share Purchase Plan). New shares issued under the Placement will rank equally with existing shares of Mantra Group except that shareholders will not be entitled to participate in Mantra Group's interim dividend payable on 31 March 2015 in respect of those new shares because they will be issued after the ex date for the interim dividend (4 March 2015).

The Placement is expected to settle on Wednesday, 25 March 2015 and the Placement Shares will be allotted on the following business day, Thursday, 26 March 2015. No shareholder approval is required to be sought for the Placement, as the Company will utilise, in part, its placement capacity under Listing Rule 7.1.

Mantra Group's shares will remain in trading halt today while the Placement is conducted. Trading in Mantra Group shares is expected to recommence normal trading tomorrow or such other time as the completion of the Placement is announced to the market.

Share Purchase Plan
A Share Purchase Plan ("SPP") will also accompany the Placement, under which eligible existing Mantra Group shareholders will be able to acquire additional shares in the Company.

Shareholders on the Company's share register at 7.00pm on Wednesday, 18 March 2015 ("Record Date"), whose registered address is in Australia or New Zealand will be entitled to subscribe for up to A$15,000 worth of Mantra Group shares through the SPP, subject to the terms and conditions of the SPP which will be set out in the SPP Booklet and dispatched to eligible shareholders in due course. Shares issued under the SPP will rank equally with existing shares of the Company except that shareholders will not be entitled to participate in Mantra Group's interim dividend payable on 31 March 2015 in respect of the those new shares because they will be issued after the ex date for the interim dividend (4 March 2015).

The issue price for shares under the SPP will be the lower of (i) the Placement Price and (ii) a 1% discount to the volume weighted average price (VWAP) of Mantra Group shares on the ASX over a 5 trading day period ending on the close of the SPP offer period (Monday, 13 April 2015).

The SPP offer period will be open from Friday, 27 March 2015 and will close at 5:00pm, Monday, 13 April 2015, subject to Mantra Group's discretion to amend these dates. Participation in the SPP is optional and Mantra Group reserves the right to scale back any applications under the SPP.

Trading Commentary
Mantra Group's strong operational performance has continued in January and February 2015, with business trading ahead of management's expectations. Forward order bookings also continue to be robust across all the businesses.

Highbury Partnership Pty Ltd is acting as Mantra Group's financial adviser.

Related Brand

Outrigger Resorts

Outrigger’s new brand vision is a reflection of 67 successful years as a hospitality company that began at iconic Waikiki Beach. Today, Outrigger welcomes guests to 15 full service beachfront resorts in stunning settings in Hawaii, Australia, Fiji, Guam, Thailand, Mauritius, and now the Maldives.
brand information
Other Brands by Mantra Group
BreakFree
Mantra
Peppers
Tribe

About Mantra Group

Mantra Group is the leading Australian-based hotel and resort operator. Mantra Group"s portfolio consists of 128 properties with more than 21,000 rooms in properties under management, across Australia, New Zealand, Indonesia and Hawaii. Operating three well-known and trusted brands – Peppers, Mantra and BreakFree - MantraGroup operates the second largest network of accommodation properties in Australia (by room number). The Group is positioned to offer both leisure and business style accommodation ranging from full-service city hotels and self-contained apartments to luxury resorts and retreats. The Group successfully listed on the ASX in June 2014 and in its first year as a public company was elevated to the ASX 200:

www.mantragroup.com.au; www.peppers.com.au; www.mantra.com.au; www.breakfree.com.au

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