It’s a Merry Christmas come early for Lantern shareholders, as the latest sale snags the biggest premium to date.
The ASX-listed Lantern Hotel Group (LTN) has all but sold off its collection of Australian hotel interests, following a decision to do so by shareholders at the AGM in October.
The company had already sold all of its ‘non-core’ pubs as part of a strategic turnaround to reduce debt and increase profitability.
Since the AGM decision, four of the six remaining core assets have been divested, the most recent being Botany’s high-ranking Waterworks Hotel for $17.228 million.
The core six were going to become the base for Lantern’s revival and subsequent expansion. They each enjoy strong revenue performance and all are ranked in the Liquor & Gaming list of venues Top 200.
However, in the stock-starved pub market, each were eyed with enthusiasm to upsides, coming largely through opportunity in food & bev performance or potential for development.
This recipe resulted in the De Angelis Group buying Uncle Buck’s for $25.3 million – a 30.5 per cent premium to 30 June book value, former Wallaby Bill Young buying the Five Dock for $28.75 million – the highest sale price to date and a 38 per cent premium to book value, and Colin Parras buying the Ambarvale Hotel for $21.2 million – a 50.2 per cent premium.
The Waterworks was marketed by CBRE Hotels directors Daniel Dragicevich and Sam Handy, with a suggested price range of $17 million. Lantern purchased the pub just two years ago for $8.25 million.
The new sale price is an impressive 65 per cent premium to LTN’s current book value, signalling the wisdom of the carefully executed sale strategy.
“We anticipated that there would be intense interest in the hotel, and this was the case as evidenced by the fact we achieved an unconditional exchange a week out from the scheduled campaign close,” relayed Handy.
LTN now hold just two assets: the Crown Hotel in Surry Hills, and the General Gordon in Sydenham.
The ideal market conditions and frenetic activity of 2016, including the sell-down of both LTN and The Keystone Group, sees CBRE report brokering 32 individual transactions this year in NSW alone, totalling nearly $300 million.
