City Developments says it is not extending its Jan 26 deadline for its offer to privatise Millennium & Copthorne Hotels. The acceptance is conditioned on CDL receiving acceptances of the final offer of more than 50% of the M&C shares. Given it already owns 65.2% of M&C, CDL believes there is little possibility of any third-party offeror emerging.
"Hence the final offer is likely to be the only liquidity event that offeree shareholders will have the opportunity to benefit from in the near to medium term in an illiquid stock," says CDL.
CDL adds that the final offer creates a period of uncertainty which is in neither in the interests of the offeree or the group. In particular, CDL believes that the full offeree board should be provided with time to consider the offeree's medium-term investment needs and capital distribution policy before announcing its preliminary results for the year ended Dec 31, 2017, due to be released in February 2018, with clarity on the ownership structure and listing status.
This is because M&C faces multiple challenges and a competitive landscape, requiring significant capital investment.
In Dec, CDL raised its offer price to 620 pence each, up from 552.5 pence earlier. The final offer represents a premium of about 36.3% to the closing price of M&C shares of 455 pence on Oct 6, the last business day before the start of the offer period.
The first closing date remains 1.00pm (London Time) on Jan 23.
This story, written by PC Lee, first appeared on The Edge Singapore.
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