CDL unit raises offer for M&C New Zealand to NZ$2.80 a share

[SINGAPORE] City Development Limited’s (CDL) wholly owned subsidiary has increased its offer to buy the shares of Millennium & Copthorne Hotels New Zealand (MCK) that it does not already own to NZ$2.80 apiece.

In a letter to MCK shareholders on Tuesday (Apr 22), CDL said the new price is “the final and best” that its subsidiary, CDL Hotels Holdings New Zealand, is willing to pay. The company will not change the price again, and neither will it make another offer within nine months.

The higher offer reflects a 60 per cent premium to the one-month volume weighted average share price of NZ$1.75. It also represents the highest share price in five years, as it matches MCK’s closing price on Jan 17, 2020, said CDL.

In addition, the offer is now unconditional, after CDL waived the 90 per cent minimum acceptance condition. New Zealand’s Overseas Investment Office, which regulates foreign direct investment into the country, has also approved the offer.

On Jan 20, CDL said the overture was made with a view to delist and privatise MCK, at NZ$2.25 a share. CDL Hotels Holdings New Zealand owns about 75.9 per cent of all MCK shares.

MCK rejected the offer on Feb 10, on the basis that the price was not sufficiently reflective of the value of its hotel and property net assets.

In a bourse filing dated Apr 22, MCK said its independent directors committee was assessing the higher offer and will provide a recommendation to shareholders by Apr 28. It encouraged shareholders to take no action in the interim.

CDL said the offer will expire on May 8.

Shares of CDL closed 2.1 per cent or S$0.10 higher at S$4.84 on Tuesday, before the announcement.