UPDATE 1-CVC, UBS plan April IPO of Australian hotel operator Mantra - source

Fri Feb 28, 2014 2:04am EST

* Australia's No. 2 hotel operator in A$500mln IPO

* Vendors UBS and CVC plan to keep shares

* CVC tried to sell Mantra for A$600mln in 2012 (Adds fund manager comment, detail on deal)

By Byron Kaye

SYDNEY, Feb 28 (Reuters) - Hong Kong private equity firm CVC Asia Pacific Ltd and UBS AG plan to list Mantra Group, Australia's second-largest hotel operator, in a public float worth about A$500 million ($448 million) in April, a source familiar with the deal told Reuters.

Mantra, which doesn't own properties but manages 130 hotels in the Peppers, BreakFree and Mantra chains around Australia, New Zealand and Indonesia, was bought by CVC in 2008. It then handed 40 percent to UBS, which financed the acquisition, in a debt for equity swap.

CVC failed to offload Mantra in 2012, when media reports suggested it could fetch more than A$600 million.

The private equity firm and UBS are now looking to capitalise on a resurgence in the initial public offer (IPO) market in Australia that has been bolstered by a strong first-half reporting season.

"People are still relaxed about the medium-term outlook for the market so they still want to be in equities," said Rohan Walsh, investment manager at fund manager Karara Capital. "If you can offer something of good quality and good valuation discount, there's an appetite to look at it."

An analyst roadshow is planned in about two weeks to market the sale with hopes for a listing date in the week before Easter in mid-April, the source said.

The vendors plan to pitch the asset as well positioned to capitalise on a two-pronged influx of Australian tourism as the weaker currency lures Asian holidaymakers and Australians who might previously have considered traveling overseas.

Revenue at Mantra is flat at A$431 million in 2013 compared with A$429 million in 2011. Mantra said in January its earnings before interest taxation, depreciation and amortization this financial year would exceed last year's A$63 million.

CBC and UBS expect to continue holding shares following the listing, the source said.

($1 = 1.1169 Australian dollars)

(Editing by Matt Driskill)