In Finance by Clyde Mooney

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After years of speculation and a change of ownership, Redcape has begun steps toward an Initial Public Offering in December.

The prominent pub group was acquired mid-2017 by Moelis Australia after several rumoured divestment considerations by its former owners, US hedge funds York Capital and Värde Partners, including a mooted IPO.

Moelis (ASX: MOE) quickly went about building and fine-tuning the portfolio, adding big-ticket assets to the collection in NSW and Queensland, even expanding into craft brewing with purchase of the Colosimo’s Australian Hotel, and trimming some under-performing venues.

Speculation has been rife the reshuffle was in the name of building the total valuation ahead of a public listing.

Yesterday stockbrokers Ord Minnett began contacting funds, with view to bringing an IPO roadshow from 17-26 October.

The documentation specifies plans to raise $100 million in funding at $1.13 per security, for market capitalisation of $615.2 million. The total enterprise value, which includes debt, stands to be $1.024 billion.

The securities project 7.8-8 per cent yield, based on proforma FY19 distributable earnings.

Redcape counts 32 hotels in NSW and Queensland, of which 31 are freeholds.

It reports in FY18 63 per cent of revenue from gaming, including TAB and Keno, 20 per cent from retail liquor sales and 17 per cent from food and bev, and is targeting 3-5 per cent growth in core operations.

Representatives from Redcape did not reply to request for comment prior to publication.