City Developments offers to buy London-listed M&C for $2.35 bln


Singapore billionaire Kwek Leng Beng is behind the offer

Maybank Kim Eng maintained its "buy" recommendation for CDL and its target price of S$11.75, following news on a possible cash offer for London-listed Millennium & Copthorne Hotels (M&C). (During the same period, IHG's RevPAR increased by 1.8 percent.) Millennium stock was down 10 percent in the past five years prior to the bid announcement.

The deal consideration would be made up of a cash amount of 545 pence per M&C share payable by Agapier Investments, together with a special dividend of 7.5 pence per M&C share, once the offer is declared wholly unconditional.

In a Tuesday report, Maybank Kim Eng analyst Derrick Heng observes that the offer price of 552.5 pence is at a 21.4% premium over its latest closing of 455 pence.

City Developments said: "Discussions on the other terms and conditions of the proposed offer, including which regulatory clearances the parties will be required to seek and obtain in relation to any offer, are ongoing between City Developments and the M&C independent directors".

CDL, which already holds a 65.2 percent stake in Millennium & Copthorne (M&C), would acquire the remaining 34.8 percent interest for £624.3 million ($822 million) under the terms of the proposed offer. It added that the company has no intention in selling or repurposing any of Millennium's hotels in London or in NY. M&C's portfolio is spread across Europe, the US, the Middle East and Asia.

Singapore's Kwek Leng Beng, chairman of Hong Leong Group, established Millennium & Copthorne following the acquisition of Copthorne Hotels from Aer Lingus. The hotelier has focussed on expansion in gateway cities including New York, London and Singapore - it now has six properties in the island city - as well as Greater China where it runs 11 hotels.

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