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- After entering a trading halt this morning, Hotel Property Investments (HPI) has already inked the details of an equity raise and multiple acquisitions
- HPI will buy three hotel properties for $63.3 million
- The hotels are spread across Brisbane, northern Melbourne and Airlie Beach in Queensland
- This aligns with HPI’s strategy of buying high-quality properties in attractive markets
- To partially fund the buy, HPI will raise up to $48 million through a security purchase plan and institutional placement
- The placement will take place at $3.04 per security — representing a 4.6 per cent discount to its five-day volume-weighted average price
- Company shares last traded for $3.15 on Wednesday, November 18
After entering a trading halt this morning, Hotel Property Investments (HPI) has already inked the details of an equity raise and multiple acquisitions.
The acquisition
Hotel Property Investments will buy three hotel properties for $63.3 million.
The first property, the Mango Hill Tavern, is a mixed use complex located 29 kilometres north of the Brisbane CBD. It includes a pub, service station and specialty tenancies.
The property’s current major tenants are Queensland Venue Co (HPI’s current major tenant) and Viva Energy. It will be bought for $31.3 million.
The second property is the Summerhill Hotel, which HPI will acquire for $22.7 million.
The Summerhill is a pub located 12 kilometres north of the Melbourne CBD. The hotel is currently leased to The Francis Group, an experienced pub operator, and a Chemist Warehouse.
The last property is the Jubilee Tavern, which is a freestanding tavern in Airlie Beach, Queensland. HPI will buy the tavern for $9.3 million.
Australian Venue Co, which operates more than 150 hotel venues around Australia, currently holds a 20-year lease.
“The acquisitions announced today represent the continuation of HPI’s strategy of acquiring high-quality properties in attractive markets which are leased to quality operators on long lease terms,” CEO Don Smith said.
The Mango Hill Tavern and Jubilee Tavern are expected to settle by the end of the year, while the Summerhill Hotel is expected to settle by the end of March 2021.
Equity raise
Hotel Property Investments is looking to raise up to $48 million through a security purchase plan and placement.
Placement
To partially fund the acquisitions, HPI will raise $40 million through a fully underwritten institutional placement.
The placement will take place at $3.04 per security, which represents a 3.5 per cent discount to the last closing price of $3.15 on November 18 and a 4.6 per cent discount to its five-day volume-weighted average price.
Security purchase plan
Eligible security holders in Australia and New Zealand may subscribe for up to $30,000 in additional securities, free of any brokerage or transaction costs, at $3.04 per security.
HPI is aiming to raise up to $8 million through the SPP which will not be underwritten. If total demand for the SPP exceeds $8 million, HPI may accept further applications.
Shares currently remain in a trading halt and HPI last traded for $3.15 on Wednesday, November 18.
