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City Developments Limited (CDL) does not plan on extending its offer to privatise Millennium & Copthorne Hotels (M&C) beyond 26 January.
CDL has offered 620 pence per share, which represents a premium of around 36.3 percent to the 455 pence closing price of M&C shares on 6 October 2017 – the last business day prior to the start of the offer period.
CDL believes there is little possibility of any third-party offeror emerging given that the group owns around 65.2 percent of M&C.
As such, the final offer is “likely to be the only liquidity event that offeree shareholders will have the opportunity to benefit from in the near to medium term in an illiquid stock”.
“Moreover, the final offer is final, will not be increased and is an opportunity that is highly unlikely to be repeated again in the near future,” it said.
It noted that M&C is currently facing various challenges and a highly competitive landscape, which requires significant capital investment that may adversely impact M&C earnings.
It also acknowledged that the final offer creates a period of uncertainty which is neither in the interest of CDL nor M&C.
“In particular, CDL believes that the full offeree board should be provided with an appropriate period to consider the offeree’s medium-term investment needs and capital distribution policy in advance of announcing its preliminary results for the year ended 31 December 2017, due to be released in February 2018 with clarity on the offeree’s ongoing ownership structure and listing status.”
It revealed that the first closing date remains at 1.00pm (London Time) on 23 January.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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