Posted on 07/22/2002 7:40:50 AM PDT by JameRetief
By Sonali Paul
MELBOURNE (Reuters) - If sex sells, now's a good time to flog it to investors while they mourn the poor performance of most of their investments.
That's the thinking of Australia's largest brothel, the Daily Planet, which unveiled plans Monday to list its property arm in a bid to build the world's largest floated sex empire.
If the plan succeeds, the Melbourne-based Daily Planet says it would be the world's first listed bordello next to other publicly traded sex industry companies, led by German sex store chain Beate Uhse AG.
"Because the old saying that sex sells is so true, because the adult industry is so massively popular and profitable, we believe the opportunities are unlimited," said Andrew Harris, one of the Daily Planet's three directors.
Prostitution is legal in some parts of Australia, but with certain curbs on it.
Amid the doom of plunging equity markets, the directors were confident that stock in the gaudy property would arouse enthusiastic interest.
"It's a novelty raising that may just perk the market up," Harris told reporters.
Daily Planet owner John Trimble, who set up the business in 1975, first wants to put 48 percent of the company in investors' hands through a A$12 million private equity offering.
He then plans a A$50 million initial public offering to float on the Australian Stock Exchange within the next six to 12 months, which would be the company's second attempt at listing.
For investors wondering how to value a bordello, Harris said they should consider it a stake in a very busy five-star hotel with revenue coming purely from room fees of A$120 an hour from each guest.
The Daily Planet has 18 themed rooms with names like Venus and Xanadu. Its Roman Room is decorated with marble columns and a giant spa. There is also a bar/lounge area with pool tables.
Some of the 18 rooms have beds, showers and heavily chlorinated spas large enough for several guests at a time.
"So when people are looking at the share offer, they should be looking at buying shares in a very successful, very long-established, five-star hotel which has a very high room turnover," Harris said.
ERECTING AN EMPIRE
The company said the Australian Stock Exchange had informally said it had no moral objections to listing the Daily Planet as long as it met standard listing requirements.
"As at this point we have received no application from the Daily Planet. We welcome their approach," an ASX spokesman said.
The company aborted its first try at going public in 1994 in the face of Victoria state legislation that would have subjected all investors in sex-related businesses to police checks.
To get the float off the ground this time, Harris came up with the idea of incorporating the property side of the business separately from the brothel operation, so that investors would not be subject to the Prostitution Control Act.
Harris said funds from the A$12 million raising exercise would be used to pay off the company's debt, to buy or develop a bordello in Sydney and buy two major Australian strip clubs.
It was also eyeing sexy lingerie businesses, cabarets and adult products companies, including Internet erotica and pornography seller Sharon Austen Ltd.
The Daily Planet planned to put A$1.0 million into a trust to secure a guaranteed 5.9 percent average annual return to shareholders over the first 10 years, or an average 8.4 percent including Australian dividend tax benefits.
"Most public companies can only return dividends of maybe 7 or 8 percent, like we're doing in the initial stages....But most of the adult industry makes 60 percent profits, which means you can pay huge dividends," Harris said.
Australia Cancels 50 Asylum Visas
Coincidence??
That's what she said!
Hug and a tug?
Flog it !
Flog it good !
Whoopee, my cliches are "clickin'"
Yes. Not only that, but there are no penalties for early withdrawal.
1. This should stimulate investor interest.
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