CDL says the offer price will remain at the pre-conditional final cash offer price of 685 pence ($11.89) per share offer for the remaining 34.8% of M&C.
CDL says the offer price is final and will not be increased.
The offer values the entire issued and to be issued ordinary share capital of M&C at £2.23 billion ($3.86 billion).
The latest offer is at a 37% premium to M&C’s closing price of 500 pence based on the closing middle market price of an M&C share on June 6.
The latest offer also represents an increase of 65 pence from the previous cash offer made to M&C shareholders on Dec 21, 2017, of 620 pence which included a special dividend of 20 pence per share.
See: City Developments to take Millennium & Copthorne private, values hotel group at $3.2 bil
However, that offer lapsed on Jan 26, 2018, because CDL did not satisfy the minimum acceptance condition of more than 50% of M&C’s shares that it did not already own.
See: City Developments not extending Jan 26 deadline for Millennium & Copthorne Hotels offer
This time round, key minority shareholders – JNE Partners LLP, MSD Capital, L.P., International Value Advisers, LLC, Classic Fund Management AG and BWM AG – who hold a total of 49.3 million shares or a 43.6% stake of what CDL doesn't already own, gave their irrevocable undertakings to accept the final offer.
This means CDL needs only 6.5% more in acceptances to clear the hurdle of more than 50% of M&C's shares that it did not already own.
M&C’s independent directors, who have been advised by Credit Suisse, consider that the terms of the final offer are fair and reasonable, and intend unanimously to recommend that M&C shareholders accept the final offer.
CDL says the maximum cash consideration payable amounts to £776.29 million which will be funded through a combination of internal cash resources as well as funds made available to CDL under a credit facility.
CDL says it has been a highly supportive shareholder since M&C’s initial public offering on the London Stock Exchange in 1996.
However, CDL says M&C faces a number of challenges and a highly competitive landscape and would require significant and targeted capital investment to reposition assets as part of its long-term strategy.
Sherman Kwek, CDL’s Group Chief Executive Officer, says, “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. 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. 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.”
