City Developments launches fresh takeover bid for Millennium & Copthorne Hotels

City Developments building and Lau Pa Sat food court in Singapore’s central business district (CBD); taken October 2018.City Developments building and Lau Pa Sat food court in Singapore’s central business district (CBD).

City Developments launched another takeover bid for Millennium & Copthorne Hotels at 685 British pence a share, in a deal that values the hotel operator at 2.23 billion pounds, or around S$3.86 billion, the Singapore property developer said Friday.

Currently, City Developments already holds around 65.2 percent of M&C, and it has received irrevocable undertakings for 43.6 percent of the M&C shares it doesn’t already own, the developer said in a filing to SGX.

The maximum cash consideration City Developments might pay is 776.29 million pounds, or around S$1.34 billion, the filing said.

The offer price of 685 pence, which will not be increased, is 65 pence higher than City Development’s previous offer for London-listed M&C in December 2017 and represents a 37 percent premium to the closing price of M&C shares Thursday, the filing said.

The previous offer had lapsed because acceptances didn’t reach the condition of more than 50 percent of the M&C shares that City Developments didn’t already own, the filing said.

“Taking M&C private is in line with CDL’s strong focus on boosting recurring income and enhancing underperforming assets,” Sherman Kwek, City Developments’ CEO, said in the statement. “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,” Kwek said. “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.”

M&C’s independent directors, under advice from Credit Suisse, have said the terms of the final offer are “fair and reasonable,” and they intend to unanimously recommend shareholders accept the terms, City Developments said.

The irrevocable undertakings are from JNE Partners LLP, MSD Capital L.P., International Value Advisers LLC, Classic Fund Management AG and BWM AG, City Developments said. Together, they hold 49.27 million M&C shares, or around 43.6 percent of the shares not already held by City Developments, the filing said.

M&C is an international hotel group with 140 hotels under ownership, management, lease or operation.

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