CDL raises offer to acquire rest of M&C
City Developments (CDL) has raised its offer price to acquire the remaining stake in London-listed Millennium & Copthorne Hotels (M&C) after feedback from some minority shareholders about the initial price.
CDL, a majority shareholder that currently holds 65.2 per cent of M&C, raised the offer price to 620 pence a share, up from 552.5 pence. They include a special dividend of 20 pence and 7.5 pence respectively.
This offer, which CDL said is final and will not be raised further, values M&C at about £2.01 billion (S$3.64 billion), compared with the previous valuation of £1.8 billion.
The earlier offer price had been criticised by some of M&C's shareholders, including Fidelity International, which said that it did not reflect the value of M&C's extensive property portfolio.
M&C owns, runs, invests in or franchises 137 hotels in 27 countries around the world.
The 620 pence offer for each share represents a premium of 38.8 per cent to M&C's closing price of 446.7 pence a share on Aug 18 - the last business day before M&C received an initial proposal from CDL.
M&C's independent directors, who are being advised by Credit Suisse, consider the terms of the final offer to be fair and reasonable.
They therefore intend to unanimously recommend that M&C shareholders accept the final offer.
"The M&C independent directors have secured further commitment from CDL that it intends to remain a hotel owner and operator and has no intention to sell or re-purpose any hotels in London or New York for at least three years," the committee of M&C independent directors said in the announcement.
The final offer for M&C enables shareholders to exit at a substantial premium, said CDL chief executive Grant Kelley.