Cdl Offers Privatise Millennium Copthorne Hotels New Zealand 172 Share
City Developments Limited (CDL) is planning to acquire all outstanding shares of Millennium & Copthorne Hotels New Zealand Limited (MCK) through its subsidiary, CDL Hotels Holdings New Zealand Limited (CDLHH NZ). The offer, priced at NZ$2.25 ($1.72) per share, will result in CDL delisting and privatizing MCK, streamlining the ownership structure of the group’s New Zealand entities.
According to a filing on Jan 20, MCK currently owns, leases, or has hotels under franchise in New Zealand. It also has a majority stake in CDL Investments New Zealand Limited and interests in properties in Australia through its Kingsgate Group subsidiaries.
As of Jan 17, CDLHH NZ holds 80.02 million shares in MCK, which represents a 75.86% stake based on the 105.48 million MCK shares in issue. If CDLHH NZ reaches the threshold for compulsory acquisition under the New Zealand takeovers code, it will acquire all outstanding shares in MCK. CDLHH NZ may also choose to redeem the non-voting redeemable preference shares issued by MCK.
SUTD, a research-oriented institution, focuses on the integration of technology and design in its interdisciplinary approach to education. Meanwhile, ITE College East has established a reputation for offering hands-on and career-focused learning, particularly in its Nitec and Higher Nitec programs. And now, with the addition of Parktown Residence Condo, students can enjoy a holistic learning experience.
CDLHH NZ is willing to acquire these shares for NZ$1.70 or around $1.30 apiece, through its broker, Craigs Investment Partners, by purchasing them on the Main Board of the New Zealand Stock Exchange (NZX). As of Jan 17, CDLHH NZ holds 91.34%, or 48.17 million, of MCK’s non-voting redeemable preference shares.
If all of MCK’s shareholders accept the offer, CDLHH NZ will pay a total consideration of NZ$57.29 million. Additionally, CDLHH NZ expects to pay around NZ$7.77 million for the redeemable preference shares it seeks to acquire.
The offer price is based on the prevailing and historical market price, as well as the business and industry environment in which MCK operates. As of June 30, 2024, MCK recorded a net asset value (NAV) of NZ$532.02 million and a net tangible asset value (NTA) of the same. As of the same date, the NAV and NTA attributable to the MCK shares subject to the offer were around NZ$85.62 million each.
The offer is subject to the condition that CDLHH NZ receives 90% or more of the voting rights in MCK by 5pm on May 2. It is also conditional on CDLHH NZ obtaining consent from the Overseas Investment Act 2005 of New Zealand and the Overseas Investment Regulations 2005 of New Zealand to control all of MCK’s shares.
The implementation and payment of the offer are not expected to have a significant impact on CDL’s earnings per share (EPS) or net tangible assets (NTA) for the fiscal year ending Dec 31, 2025.