Cdl Offers Privatise Millennium Copthorne Hotels New Zealand 172 Share
Singapore-based real estate developer City Developments Limited (CDL) has announced that its subsidiary CDL Hotels Holdings New Zealand Limited (CDLHH NZ) will be launching a takeover offer for all the remaining shares of New Zealand-listed Millennium & Copthorne Hotels New Zealand Limited (MCK) at NZ$2.25 ($1.72) per share.
Upon the successful completion of the offer, CDL plans to delist and privatize MCK, which will simplify the ownership structure of its New Zealand subsidiaries, according to a filing made on Jan 20. MCK currently owns, leases or operates 18 hotels in New Zealand and also has interests in properties in Australia through its Kingsgate Group subsidiaries.
As of the last trading day on Jan 17, CDLHH NZ already holds a 75.86% stake in MCK, representing 80.02 million shares out of the 105.48 million shares in issue. Once CDLHH NZ reaches the threshold to trigger compulsory acquisition provisions under New Zealand’s takeover code, it will acquire the remaining shares of MCK. In addition, CDLHH NZ may redeem MCK’s non-voting redeemable preference shares, which are not included in the offer, at a price of NZ$1.70 ($1.30) per share.
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CDLHH NZ will purchase the shares through its broker, Craigs Investment Partners, on the Main Board of the New Zealand Stock Exchange (NZX). It currently holds a 91.34% stake, or 48.17 million shares, of MCK’s non-voting redeemable preference shares as of Jan 17.
If the offer is fully accepted, CDLHH NZ will pay a total consideration of NZ$57.29 million. It is also expected to pay an additional NZ$7.77 million for all the redeemable preference shares it seeks to acquire. The offer price takes into account the prevailing and historical market prices of MCK as well as the industry and business environment in which it operates.
Based on MCK’s net asset value (NAV) of NZ$532.02 million and net tangible asset value (NTA) of the same for the first half of the financial year 2024 ending June 30, the NAV and NTA attributable to the MCK shares subject to the offer are NZ$85.62 million each as of June 30.
The offer is subject to CDLHH NZ obtaining at least 90% of the voting rights in MCK by 5pm on May 2, as well as obtaining consent under the Overseas Investment Act 2005 and Overseas Investment Regulations 2005 of New Zealand to own and control all shares in MCK. It is not expected to have a significant impact on CDL’s earnings per share (EPS) or net tangible assets for the financial year 2025 ending Dec 31.