Charter Hall buys stake in Hotel Property Investments as 360 Capital sells
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The news: Charter Hall and Charter Hall REIT have equally funded a joint venture trust which has acquired a 14.8% strategic stake in ASX-listed Hotel Property Investments (HPI), while 360 Capital has sold its HPI stake.
The numbers: The acquisition, which sees Charter Hall become HPI's largest shareholder, was made for a total consideration of $97 million, equivalent to $3.35 per HPI share.
At the same time, 360 Capital Group announced it had sold its strategic stake in HPI for $96.9 million which the company said sold for a premium of $13.9 million above the group's carrying value of the stake.
HPI owns a portfolio of 57 Australian convenience hotel properties, predominantly located on the eastern seaboard and leased to the Queensland Venue Company and Australian Venue Company.
Sydney-based Charter Hall said that its investment in HPI reflects an annualised FY24 distribution yield of 5.7% and a 15% discount to HPI's last published net tangible assets per stapled security.
Shares of Charter Hall (2.15%), Charter Hall REIT (0.82%), Hotel Property Investments (3.98%), and 360 Capital Group (14.02%) were all trading higher by 11:33am AEDT.
The context: Funding of the acquisition by Charter Hall was from cash reserves, and while Charter Hall REIT allocated cash proceeds generated from recent divestments.
Both Charter Hall and Charter Hall REIT reaffirmed their previously announced earnings per share guidance for the 2024 financial year.
As a result of the sale, 360 Capital said it had withdrawn its earnings guidance for FY24. It also noted the sale along with recent capital commitments for the 360 Capital REIT capital raising and the market buyback of the group's securities enabled the company to have approximately $114 million in cash, equivalent to about $0.53 per security. The stock was trading at $0.61 by 11:33 AEDT.
The sources: ASX announcement , ASX announcement
