The shake-up of listed Lantern Hotel Group continues, with the surprise sale of its top asset to publican Andrew Lazarus for $24 million.
Warwick Farm’s El Toro Motor Inn sits on a 1.4 Ha block, and has long been a top performer in Sydney’s gaming heartland – situated on the border of Fairfield and Liverpool.
The hotel itself is long overdue for renovation, and the troubled Lantern has seen its ranking drop from #92 in the State in 2010 to #136 in March of this year.
But as other gaming-centric hotels continue to transact for top dollar, the underutilised El Toro has been sold for a premium to its December 2014 carrying value that represents a definite opportunity for Lazarus.
Lantern (LTN) disclosed the intention to sell on the ASX today, reporting that the divestment “will increase net asset value per security (before costs) from 11.5cps to 12.4cps”.
Lantern’s board is meeting today, and sources say the sale will be the topic of heated debate by the new directors, who it seems may not have been aware of it being on the market.
Shareholders recently voted to oust the existing directors, citing poor performance and insufficient relevant experience running such a company.
The new directors are intended to restructure and rescue the company, which reported a greater than $2 million loss across its $97 million portfolio in FY14.
Sale of the El Toro was conducted through JLL Hotels, which also recently sold the Macquarie Hotel in Liverpool to Lazarus for $25 million.
“The transaction uniquely represented a premium to carrying value for the vendors, and offered exciting trade growth and large-scale redevelopment potential for the purchasers, so it was a win-win in every respect,” said JLL national director John Musca.
PubTIC contacted Andrew Lazarus, but did not receive a reply in time for publication.
