* Mantra welcomes takeover at "significant premium"
* Offer at 23 pct premium to last trade before announcement
* Merged group to have about 11 pct of Australian market-IBISWorld
* Merger needs foreign investment, competition approvals (Adds share movement, background, analyst comment and details about deal)
By Shashwat Pradhan
Oct 12 (Reuters) - Mantra Group Ltd MTR.AX on Thursday agreed to a A$1.18 billion ($920 million) takeover offer from France's Accor SA ACCP.PA , which would put together the two biggest hotel groups in Australia.
The merger would give the combined group about 50,000 rooms or roughly 11 percent of Australia's hotel market, according to IBISWorld statistics. The deal comes as the country's hoteliers rush to build more rooms to meet growing demand. offered A$3.96 per share, which was a 23 percent premium to Mantra's last trade before the bid was announced on Monday. board has concluded that the sale of the company at a significant premium to market is an attractive outcome for shareholders," Mantra Chairman Peter Bush said in a statement.
Under the deal, Mantra may pay out a special dividend of 23.5 cents per share to its shareholders, which would then be deducted from the A$3.96 that Accor has offered.
Mantra's board urged shareholders to approve the deal. Shares in Sydney-listed Mantra edged up 0.1 percent in early trade to A$3.88, indicating investors are not holding out for a higher bid and expect the deal to go ahead.
"We priced in the bid earlier this week, but now that the board has accepted it, there is still a bit more to squeeze out of this fruit," said Ben Le Brun, market analyst at OptionsXpress.
The merger will need clearance from Australia's Foreign Investment Review Board and the Australian Competition and Consumer Commission, Mantra said.
($1 = 1.2829 Australian dollars)