SEQ Hospitality, headed by rich-lister Nick Politis, has put up a $77 million bid for listed publican landlord Eumundi Group, but one major shareholder and hospitality player is holding out.
Eumundi began as a craft brewery named after its location, within the Sunshine Coast, and went on to list on the ASX in 1989 (ASX:EBG).
The group owns and operates Ashmore Tavern, also on the Gold Coast, as well as the Aspley Central Tavern in Brisbane’s north and the Quench chain of liquor stores. Its investment portfolio incorporates both the Aspley Shopping Centre and Aspley Arcade Shopping Village, and freeholds of Kickon Group’s Plough Inn in South Bank and the Court House Hotel in Murwillumbah, operated by Athena Hospitality.
SEQ Hospitality Group operates pubs including the Osbourne Hotel in Fortitude Valley. It is part of the Fortitudo Group, which operates multiple pubs, including the Treetops Tavern at Burleigh Waters, and a string of bottleshops.
Politis is chairman of the Sydney Roosters and an AFR rich-lister, and some of his companies own 50 per cent of SEQ.
These entities have put up a $77 million cash takeover bid for Eumundi. Politis told the Australian Financial Review Fortitudo CEO Andrew Prothero was driving the deal, prompting Prothero to express that they see “lots of opportunity” in south-east Queensland.
For the past year EBG shares have fluctuated little from an average of around $1.20. Market cap is reported at $79.62 million. FY24 reporting outlined Eumundi revenues of $30.4 million, with net profit of $4.3 million.
EBG has agreed to a possible transaction that would see SEQ purchase all Eumundi shares for $1.55, through a scheme of arrangement. This represented a 23 per cent premium to Eumundi’s closing price at the time.
EBG is headed by Brisbane lawyer Joe Ganim, who is a veteran of hospitality investment and holds 26.16 per cent of the company. Fellow director Gilbert De Luca holds 17.18 per cent.
Ganim and De Luca have recommended shareholders accept the offer, which Ganim described as a “substantial premium” to the market price.
Extolling SEQ and Fortitudo’s “excellent understanding” of the industry, he proffered that the bid provided shareholders with “an attractive exit” from EBG, although the market cap actually suggested the value of shares at $1.599 – before any takeover premium.
Steven Shoobridge owns Star Group, which counts a fleet of around two-dozen pubs, mostly in the Sunshine State. He is also a major investor in Eumundi.
During the closing days of October Shoobridge acted on his confidence in EBG by purchasing another (roughly) half-million shares, increasing his slice and voting power to just over 18 per cent of the register.
EBG closed today at $1.65 – up 30.95 per cent from the day of the bid, and 37.5 per cent on the past year’s average.
“The offer is too low and there is more value in Eumundi,” Shoobridge told PubTIC.
“I am a buyer at this level, so they need to increase their offer for me to be a seller.”
A Fortitudo Group representative was contacted about the potential for a sweetened bid.
