CDL announces possible buyout offer for Millennium & Copthorne Hotels

Millennium Vee Taichung, a a Millenium & Copthorne hotel in Taiwan.
Millennium Vee Taichung, a a Millenium & Copthorne hotel in Taiwan.PHOTO: MILLENNIUM & COPTHORNE HOTELS

SINGAPORE - Property giant City Developments (CDL) said on Monday (Oct 9) that it is considering a proposed cash offer for London-listed subsidiary Millennium & Copthorne Hotels at 552.5 pence a share.

An offer at that price would value the M&C hotel group at about £1.794 billion (S$3.2 billion).

CDL indirectly owns about 65.2 per cent of M&C. Both CDL and M&C are members of the Hong Leong group of companies.

In an exchange filing on Monday (Oct 9), CDL said the proposed offer price represents a premium of about 23.7 per cent to the closing price per M&C Share of 446.7 pence on Aug 18, being the last business day prior to the date on which an initial proposal was received by M&C from CDL.

The proposed offer would be made up of a cash amount of 545 pence per M&C share, together with a special dividend of 7.5 pence per share payable to all M&C shareholders upon the offer becoming unconditional.

CDL said that it intends to maintain M&C's current business model, in particular to run the business as an owner and operator of its hotel portfolio. CDL also confirms it has no intention to sell or repurpose any of M&C's hotels in London or in New York.

CDL would make the proposed offer through its unit, Agapier Investments.

M&C's independent directors, who do not include the appointees of CDL to the M&C board (such as Mr Kwek Leng Beng, Mr Kwek Leng Peck and Mr Kwek Eik Sheng), formed an independent committee to evaluate CDL's proposed offer, CDL said.

CDL said there can be no certainty that a formal offer will be made. The proposed offer will be made solely by certain offer documentation, which will set out the full terms and conditions of any offer, it added.

Its shares last changed hands at S$11.64, up 4 Singapore cents or 0.34 per cent so far on Monday before a trading halt was called prior to the announcement.

CDL called for trading to resume at 3pm after requesting for a halt earlier in the session.