Analysis of Accor Hotels' Acquisition Offer for Mantra Group

The assignment examines a $1.2 billion acquisition attempt by Accor Hotels to acquire Mantra group, focusing on the regulatory framework in Australia that governs such transactions. This includes a discussion of the Australian Corporations Act, which sets thresholds for triggering takeover laws and outlines specific conditions under Chapter 6 that apply when acquiring more than 20% voting power or attempting full acquisition. Exceptions to these rules are also analyzed, including schemes of arrangement approved by shareholders. The assignment considers how international acquisitions might become streamlined in the future, with a reflection on current trends impacting global mergers and acquisitions.

1
Takeovers and Acquisitions
Name:
Course
Professor’s name
University name
City, State
Date of submission

2
The article in review was written by David Chau for ABC News network on 9th October 2017.
The article talks about the takeover offer of $1.2 Billion that Paris based Accor Hotels offered to
acquire Mantra group which is the second largest hotel group in Australia. I have observed that
there are regulations that have been put in place by the Australian government takeover panel
when an acquisition or takeover involves a company that is listed in the Australian Stock
Exchange. Mantra group has active stocks in the ASX and therefore there are requirements that
Accor hotels are supposed to fulfill before acquiring the company.
The regulatory framework set for acquisitions and takeovers is such that the corporation Act sets
a threshold of 20% of the listed company in order to activate the takeover laws. In this case,
Accor Hotel intends to acquire the whole of Mantra group (DePamphilis, n.d.).
The issues raised in the article is whether there are any huddles that the company may face when
Acquiring Mantra group. The takeover laws set out in Chapter 6 of the corporations Act, regulate
direct or indirect acquisitions in Australian companies that are listed with more than 50
members. In particular the law sets out that no company can increase its voting power to more
than 20% (Müller-Stewens, Kunisch and Binder, n.d.) .
There are exceptions to this rule which include acquisitions under a takeover that is formal which
target shareholders can participate. Second, the 20% rule does not include schemes of
arrangement, acquisition with approval from a majority of the shareholders who are not parties
of the transaction. Another exception is the acquisition of no more than 3% of the voting rights
every six months (Turner and Trone, 2013). There is also downstream acquisition of shares in
an Australian company that result from acquisition from upstream acquisition in companies
listed on the ASX with approval by the Australian Securities and Investment commission.

3
The acquisition of Mantra group by Accor group of France is a market bid that is outlined in
s635 and s634 . The procedure requires that the buying company buys all the securities in the bid
class. The takeover can also be done under Chapter 5 of the Australian Act by using the schemes
of arrangement (Turner and Trone, 2013). Mantra group may come up with a scheme proposed
to its members under which 100% of the target shares are transferred to Accor Hotels (the
acquirer) in return for a cash payment. This is another way in which the acquisition can take
place. In my observation of this acquisition , the 20% threshold has been surpassed and therefore
take over laws are triggered and also because the takeover is more than 50% there will be
resolutions made to remove directors of Mantra group.
The world is witnessing the beginning of a new trend in the habits and customs associated with
the management of mergers and acquisitions of global companies by foreign companies, as
reflected in the persistent myths surrounding such agreements.In my view, future mergers and
acquisitions between companies from different counties will be easier when the laws in various
countries will be streamlined to enable a simple takeovers or acquisitions (White, 2003).
References
DePamphilis, D. (n.d.). Mergers, acquisitions, and other restructuring activities.
Müller-Stewens, G., Kunisch, S. and Binder, A. (n.d.). Mergers & Acquisitions.

4
Turner, C. and Trone, J. (2013). Australian commercial law. Pyrmont, N.S.W.: Thomson Reuters
(Professional) Australia.
White, K. (2003). Acquisitions. Columbus, MS: Genesis Press.