Redcape proposes to delist

Redcape chief executive officer Dan Brady.

Postscript: shareholders voted to delist on September 10.

Redcape Hotel Group directors have proposed to delist with a $247 million buyback.

The board yesterday recommended investors accept an offer of $1.15 per share.

The unit price is two cents more than in 2018, when it listed.

A private entity of MA Financial last month paid $54.5m for a Bendigo pub offloaded by Redcape in 2017.

It is also 16 cents less, when based on net asset value.

Redcape holds 36 venues – 28 of which are in NSW with the balance in Queensland.

It also owns 26 bottle shops, three accommodation venues and The Australian Brewery.

In FY21, it reported a 52 per cent rise in underlying earnings.

Its revenue is heavily reliant on gaming.

Shareholders have also complained of excessive management fees.

“Since IPO in November, 2018, Redcape has consistently traded at a discount to Directors Net Asset Value despite the strong operational performance reflected through positive increases in independent valuations across its portfolio,” non-executive chairman Nick Collishaw said.

“The Independent Board Committee believes that the listing proposal is the most attractive pathway to maximising the value of Redcape securityholders’ interests,” he added (story continues below).

Shares rose 20pc after the announcement to close the day at $1.11.

Delisting path

Unitholders will vote about the delisting on September 10.

If approved, it would occur on November 2.

Investors can transfer their shares into an open-ended unlisted funds which would retain the same manager, MA Financial, formerly known as Moelis Australia.

The company’s chief executive role would still be held by Dan Brady.

Shareholders can also buy additional stock in the unlisted entity via a rights issue.

Redcape acquired four pubs – in Sydney and Brisbane – in FY21.

In July, MA Hotel Management, a private entity of MA Financial, spent $54.5m on Bendigo’s All Seasons Resort Hotel.

That vendor, Melbourne investor David Feldman, paid Redcape $24m in 2017.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of