Singapore-listed City Developments Limited (CDL) has launched a £776.29m (US$986.8m) takeover offer for UK-listed Millennium & Copthorne (M&C) Hotels amid an “increasingly challenging” global hospitality landscape.
CDL made a final offer of 685 pence per M&C stock for the outstanding 34.8% of shares that it didn’t own, having already secured “irrevocable undertakings” for almost half of the remaining shares.
The offer values M&C Hotels, which owns, manages and invests in 140 hotels globally including more than 40 across Asia Pacific, at £2.23bn (US$2.84bn), CDL said in an announcement.
“Taking M&C private is in line with CDL’s strong focus on boosting recurring income and enhancing underperforming assets,” said CDL Group CEO Sherman Kwek.
“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.”
CDL founded Millennium Hotels with the acquisition of six Asian hotels in 1989, and then floated the business on the London stock exchange in 1996.
The takeover bid follows CDL’s acquisition of a 24% stake in Chinese developer Sincere Property Group and a majority stake in one of its Shanghai commercial assets for a combined RMB 6.7bn (US$973.3m) last month.
The deal marked CDL’s single largest investment in China and expanded the firm’s geographical presence from 3 cities to 20.
Listed on the Singapore stock exchange, CDL owns a portfolio of residences, offices, hotels, serviced apartments, integrated developments and shopping malls.