PRIVATE equity manager Archer Capital has dumped plans to takeover serviced apartments manager Oaks Hotels & Resorts.
Oaks said discussions with Archer to privatise the company have been ongoing for several weeks but Archer’s indicative proposal has not been formalised and will not proceed.
The news saw Oak shares fall 11 cents to close at a 52-week low price of 65 cents last Friday.
“Discussions between Oaks and Archer have ceased,” the company said the statement.
Oaks said the parties inability to reach agreement on a number of issues has resulted in both agreeing to terminate discussions.
“Oaks understands that the option agreement between Brett Pointon (the managing director and founder of Oaks) and Archer will be terminated,” the company continued.
In August, Pointon who has a 54.1% stake in the company granted a call option to Archer to acquire shares in the company totalling 19.9% interests.
No break fees are payable to either party as a result of the termination.
Meanwhile Oaks said for the first three months it is trading on budget. Net profit after tax has grown 55% when compared to the corresponding period last year, from $2.03 million to $3.1 million and EBITDA is up 66% from $4.9 million to $8.3 million for the same period.
With the continued ramping up of inventory growth within Oaks existing property portfolio, coupled with the openings of Liwa Heights, Dubai, Gateway on Palmer, Townsville and Oaks Broome, Roebuck Bay, Oaks remains confident of achieving 2009 financial year of earnings before interest, tax, depreciation and amortisation (EBITDA) between $41 million and $44 million (including $5m from MLR sales).
Australian Property Journal
