Singapore's CDL Makes Fresh Bid To Buy Rest Of Millennium & Copthorne Hotels
Millennium & Copthorne Hotels Plc has agreed to be acquired by majority owner City Developments Ltd (CDL) in a deal that values the British company at £2.23 billion, the companies have announced.
The deal comes a year after minority shareholders of M&C blocked a takeover bid by CDL on the grounds that it did not reflect the value of the company's property portfolio.
This time, CDL has received irrevocable undertakings to accept the offer from key minority shareholders, who own about 43.6% of the M&C shares not already held by CDL, the Singaporean company said.
The maximum cash consideration payable by CDL amounted to £776.29 million and will be funded through a combination of cash and debt, the company said. It said the offer was final and would not be increased. Singaporean billionaire Kwek Leng Beng is the chairman of both of the entities.
Fair And Reasonable Terms
The operator of the Millennium, Grand Millennium, Copthorne and Kingsgate hotels said its independent directors consider the terms of the final offer to be fair and reasonable.
"Taking M&C private is in line with CDL's strong focus on boosting recurring income and enhancing underperforming assets. We are pleased to have garnered the support of M&C's independent directors and key minority shareholders. The offer enables shareholders to exit an illiquid stock at a significant premium," CDL CEO Sherman Kwek said.
Lower Revenue Per Room And Plans To Improve Efficiency
In May, the luxury chain, which owns seven hotels in London, reported lower revenue per room for the first quarter of 2019 as renovations kept its major hotels in London and Singapore partially or fully closed.
CDL said it intended to work with M&C to improve the efficiency of its hotels by leveraging on CDL's infrastructure, network and financial resources. It said it would become increasingly involved in the operational and financial management of M&C.
M&C's independent directors have been advised by Credit Suisse. Barclays Bank PLC and Merrill Lynch (Singapore) are the joint financial advisers and Linklaters LLP is the legal adviser to CDL.