The looming presence of the partnership between Moelis & Co and hotelier Nelson Meers has stepped into the light, with the entity disclosing a play at the prized Redcape portfolio.
Purchased in a fire-sale situation by New York hedge funds Goldman Sachs, York Capital and Värde Partners following the GFC, Redcape Hotel Group (RHG) currently operates more than two-dozen pubs, mostly in NSW.
Significantly for the Moelis-Meers partnership, which has purchased top gaming pubs the Grand Hotel in Rockdale and Oasis on Beamish in Campsie in the past year for $65 million, RHG holds positions one and five on OLGR’s list of gaming venues in NSW.
The Australian Financial Review reports Moelis and Nelson Meers Hotels (NMH) have been speaking with major investors to raise money for the acquisition, to which they will contribute around 50 per cent.
The opportunity represents an attractive cash yield of around 13 per cent to the investment sector, which continues to look for opportunities in the wake of the flat international money market.
Redcape has been dodging rumours of a public float for two years, and finally confirmed the play in July with the appointment of JPMorgan and UBS to manage a book build and investigate an IPO.
However the recent stock market volatility is said to have the bean counters looking at other options, including a trade sale.
This potential already saw Charter Hall – the driving force behind the successful Long WALE Investment Partnerships I and II – reveal it is considering teaming up with Australia’s largest publican, the 75 per cent Woolworths-backed ALH, for a bid on the Redcape portfolio that could top $500 million.
PubTIC was unable to secure a response from Charter Hall on their pursuit of the portfolio prior to publication, but the AFR says ‘sources’ have revealed the Moelis-Meers collaboration is confident of securing the big-dollar purchase before the end of the year, ahead of its own float in early 2016.