These two ASX companies announced deals to buy some Australian pubs
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Pubs have been one of the biggest M&A markets in 2021, but few ASX stocks have seen much of the action – until this morning.
After a weak 2020, hit by COVID-19 restrictions, this year has been stronger with $1.1 billion in pub sales in the first three quarters of 2021 according to Real Capital Analytics, just short of the total figure for 2017 and 2019.
But arguably, you wouldn’t know it was the case on the ASX with pub investor Redcape (ASX:RDC) delisting and the proposed IPO Australian Venue Co ultimately being canned.
One of the few remaining ASX stocks is Hotel Property Investments (ASX:HPI).
It has been an active buyer this year and this morning unveiled a handful of further deals which would take its total assets to $1.1 billion.
Headlining the deals was a portfolio of seven pubs in South Australia for $66.1 million, which included the Unley in Parkside and the West End Tavern and has a weighted average passing yield of 5.4%.
It also announced it was parting ways with the Acacia Ridge Hotel for $25 million and that it had completed a $3.8 million development of the Ferry Road Tavern at the Gold Coast.
The company tipped a shareholder payout of 20.5 cents per share assuming there was no material change in market conditions.
The other ASX company unveiling a pub buying deal was MA Financial (ASX:MAF) – until recently known as Moelis.
This company too is no stranger to the pub business having been behind the listing of Redcape.
Today it announced it was buying the Hotel Brunswick in New South Wales for $68 million. This time it would be managed internally by a dedicated hotel management fund which also owns the Beach Hotel at Byron Bay.
Between these two pubs Moelis now has $170 million in assets in New South Wales’ Northern Rivers region.
“Hotel Brunswick has always enjoyed the benefit of the enormous footfall of tourist visitation and dollar spend to the region and as a freehold going concern asset the hotel will benefit from our platform expertise,” said the CEO of the fund Dan Brady.
The news sent MA shares up over 4% despite the company completing a capital raising.