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BREAKING NEWS

BREAKING NEWS

Singapore's CDL makes fresh bid to buy rest of Millennium & Copthorne Hotels

Singapore's CDL makes fresh bid to buy rest of Millennium & Copthorne Hotels
FILE PHOTO: A City Developments Limited (CDL) logo is seen on a building in Singapore May 26, 2016. REUTERS/Edgar Su -
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Edgar Su(Reuters)
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(Reuters) – 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 said on Friday.

Shares of M&C surged 35% to the top of the FTSE midcap index and were near the offer price of 685 pence per share. The Singapore-listed real estate firm owns a 65.2% stake in M&C, according to Eikon data from Refinitiv.

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. CDL’s previous offer had been for 620 pence a share.

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 pounds 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 the entities.

On Friday, 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,” CDLCEO Sherman Kwek said.

“The offer enables shareholders to exit an illiquid stock at a significant premium.”

The luxury chain, which owns seven hotels in London, in May reported lower revenue per room for the first quarter 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.

(Reporting by Samantha Machado in Bengaluru and Aradhana Aravindan in SINGAPORE; Editing by Shinjini Ganguli and Anil D’Silva)

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