Monday, November 11, 2013

Party like it's 2007

The latest property advertorial from Nick Dalton at the Cairns Post is all nostalgic for the era of Chris Skase. Elsewhere today it is revealed that the remains of Tom Hedley's collapsed pub empire is to again be relaunched.

Hedley Leisure & Gaming was renamed Redcape when Tom was given the boot from management control and the HQ was relocated from Aumuller St to Melbourne. Substantial local FNQ wealth was flushed down the toilet as net assets evaporated and evil death star Goldman Sachs wiped up what was left: Pub fund to test thirst for shares
Hotel Property Investments, formerly Redcape Property Services, will list on the ASX in December at an initial value of up $285 million.
In the initial public offering the new pub real estate investment trust will offer units at between $2 to $2.15 and will have a portfolio of 41 pubs and 7 detached bottle shops and some specialty stores, most of which are located in Queensland with the remainder in South Australia.
The group derives close to 95 per cent of its income from Coles-run outlets and will look to source other assets once listed.
Analysts said it would be similar to the ALE Property Group, which owns a large amount of pubs leased to Woolworths.
The joint advisors, Goldman Sachs and JPMorgan will lodge the prospectus on Thursday, November 21, with a listing date of December 12.
JPMorgan analysts valued HPI above $500 million, of which half will come from the float, and said the company should come to market with a 7.8 per cent distribution yield. It reckons HPI investors could expect a 12 per cent internal rate of return.
The pub float is the first in the sector for at least five years after the now-defunct ING Real Estate Entertainment Fund, which changed its name to Lantern Hotel Group last year. It also comes two months before the planned float of John Singelton/Carnegie-backed Australian Pub Fund.
The new fund should still hold several FNQ pubs and bottle shops so I await the prospectus with interest and nostalgic memories of those halcyon days when Tom was the local hero at the Cairns Post. Party like it's 2007!

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