Institutional brokers Moelis and Ord Minnett launched their fundraising on Wednesday for an initial public offering of Redcape Hotel Group, 32 pubs (only one of which isn’t freeheld) in Queensland and NSW (22 in greater – or more accurately poorer – Sydney). Notably, the offer document forecasts 63 per cent of group revenue in the current fiscal year in gaming, compared to just 20 per cent in on-premise food and beverage. So not one for the wowsers of funds management – or “ethical investors” if you’re Reverend Tim Costello, who must right this moment be choking on his Killjoy McMuffin in the food court at Nanny State Westfield. Redcape will list with $100 million of new capital and an implied market capitalisation of $615.2 million. In no coincidence, Redcape’s pubs will be operated by managing company … (wait for it) … Moelis Australia Hotel Management.
Moelis Advisory is, of course, helmed by the indefatigable and inimitable Andrew Pridham, the president of South Melbourne Football Club (or, to Collingwood’s Eddie McGuire, the Bondi Swans). Cute, then, that Redcape’s board of directors is to include one Andrew Ireland, who retired at the conclusion of this AFL season as the chief executive of the Emerald City’s aforementioned Aussie rules club.
Don’t get us wrong: if Redcape sells as many schnitzels (or swallows as many $100 bills) as Ireland’s footy clubs (including Brisbane’s Lions, as McGuire would bitterly remember) won premierships, even Stephen Mayne would slap a buy on the thing. Still, this does appear to be a rather ballsy piece of back-scratching by comrade Pridham, even as (simultaneously) the REIT’s manager and underwriter.
Moelis, which will own a sizeable 29.7 per cent of Redcape post-float, is represented directly on the board by Pridham’s COO Hugh Thomson, who previously ran ING Real Estate Investment Management.
And here we come full circle for the Bloods and the bloody pokies: it was another ING asset manager, its Real Estate Entertainment Fund, which a decade ago forgave large slabs of rent overdue from its tenant, Club Swans, on the Kings Cross pokies palace it operated adjacent to the storied Bourbon, all while Pridham’s predecessor Richard Colless chaired both the landlord fund and the resident (footy) club of the same name. Colless had only the previous year stood down as a director of said (licensed) club. Thankfully, Thomson was at ING at the time and rushed to Colless’ defence, explaining Colless was not involved in the decision.
Note, for the record, the Swans don’t operate pokies any longer. Hawthorn FC trousered $17 million in pokies revenue in calendar 2017, from which it got a profit of $4 million. Brisbane, Carlton, Collingwood and Essendon (by revenue) were barely behind them.
Hey, don’t take us for disciples of Costello (the Elder; we freely admit to defer to Costello the Younger, at least if next month he becomes our publisher’s chairman) – but last time we checked, democratic freedom included one permitting adults to squander their dole cheques however they wish to. Regardless, for another exemplar of the smallness of Australia’s superintendence and superintendents, this one ain’t bad.