CDL launches another attempt to buy Millennium & Copthorne Hotels for S$3.9b

Singapore-listed real estate firm City Developments Ltd (CDL) announced on Friday (Jun 7) another attempt to buy Britain’s Millennium & Copthorne (M&C) Hotels, this time for £2.23 billion (S$3.9 billion).

The offer represents a premium of about 37 per cent to M&C’s closing price of 500 pence on Thursday.

Currently, CDL owns approximately 65.2 per cent of M&C. This offer is final and will not be increased.

Shares of M&C surged 35 per cent to 680 pence after the announcement, topping gainers on the FTSE midcap index .

M&C shareholders will be entitled to receive 685 pence for each share.

This represents an increase of 65 pence from the previously recommended final cash offer of 620 pence per M&C share (which included a special dividend of 20 pence per share) made to M&C shareholders on Dec 21, 2017.

CDL in 2017 offered to take M&C private in a deal valued at £1.8 billion. The offer lapsed on Jan 26 last year because CDL did not satisfy the minimum acceptance condition of more than 50 per cent of M&C’s shares that it did not already own.

CDL is part of Singapore-headquartered Hong Leong Group.

The move will bring the operator of the Millennium, Grand Millennium, Copthorne and Kingsgate hotels back into the fold of billionaire Kwek Leng Beng’s property empire.

This time around, CDL said, it has received “irrevocable undertakings” from key minority shareholders to accept the final offer. These key shareholders hold about 43.6 per cent of the M&C shares not already owned by CDL.

Mr Sherman Kwek, CDL’s group CEO, said: “Taking M&C private is in line with CDL’s strong focus on boosting recurring income and enhancing underperforming assets.

“The offer enables shareholders to exit an illiquid stock at a significant premium. We believe that a privatised M&C will be in the best position to navigate the increasingly challenging and competitive global hospitality landscape with agility and nimbleness. M&C will be able to leverage CDL’s significant resources, comprehensive real estate capabilities and global network to reposition its assets and drive sustainable hotel performance.”

Source: CNA – 8 Jun 2019

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