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City Developments Ltd (CDL) has increased its offer to purchase the remaining stake it does not yet already own in Millennium & Copthorne Hotels (M&C), reported The New Paper.
Compared to its previous offer of 552.5 pence per share for the remaining 34.8 percent stake in the London-listed hotel owner and operator, the Singapore-listed property developer has raised it to 620 pence apiece.
This translates to a £2.01 billion (S$3.64 billion) valuation for M&C versus £1.8 billion (S$3.27 billion) initially. The former comes with a higher special dividend of 20 pence, up from 7.5 pence previously.
CDL upped its price after some minority shareholders, including Fidelity International, said the prior offer doesn’t take into account M&C’s large real estate portfolio. In fact, the latter owns, operates, franchises and invests in 137 hotels across 27 countries around the globe.
The developer stated that this is its final offer and this represents a 36.3 percent premium to M&C’s closing price of 455 pence on 6 October 2017. On the other hand, M&C’s independent directors, who have been advised by Credit Suisse on this matter, consider the final offer as fair and reasonable.
“This final offer provides shareholders with the ability to realise their investments in cash at a valuation which has not been seen pre-bid since 2007,” said CDL’s Chief Executive Grant Kelley.
The property developer also pledged that it will not sell or repurpose any of M&C’s hotels in London or New York for at least three years. It now needs the consent of at least 50 percent of M&C’s independent shareholders for the transaction to push through.
“In taking M&C private, we believe the company will be best placed to compete in this increasingly competitive global landscape, benefitting from greater investment and the ability to further leverage CDL’s significant infrastructure and resources,” he added.
This article was edited by Keshia Faculin.
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