Cdl Offers Privatise Millennium Copthorne Hotels New Zealand 172 Share
City Developments Limited (CDL) is offering NZ$2.25 ($1.72) for all the shares it does not currently have in New Zealand-listed Millennium & Copthorne Hotels New Zealand Limited (MCK), through its subsidiary CDL Hotels Holdings New Zealand Limited (CDLHH NZ). This offer is part of CDL’s plan to delist and privatise MCK, simplifying the ownership structure of the group’s New Zealand entities.
As of Jan 17, CDLHH NZ holds 80.02 million shares in MCK, equivalent to a 75.86% stake based on 105.48 million MCK shares in issue. If CDLHH NZ reaches the threshold to invoke compulsory acquisition provisions under the New Zealand takeovers code, it will acquire all outstanding shares in MCK. CDLHH NZ also has the option to redeem the non-voting redeemable preference shares issued by MCK.
In addition to the shares, CDLHH NZ is willing to acquire non-voting redeemable preference shares at NZ$1.70 ($1.30) per share, totaling to around NZ$7.77 million. The purchase will be done through its broker, Craigs Investment Partners, 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.
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If all MCK shareholders accept the offer, CDLHH NZ will pay a total of NZ$57.29 million. The offer price takes into account the prevailing and historical market price, as well as the industry and business environment of MCK.
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 amount. This translates to an NAV and NTA of NZ$85.62 million each for the MCK shares subject to the offer.
The offer is conditional on CDLHH NZ receiving at least 90% of the voting rights in MCK by 5pm on May 2. CDLHH NZ also needs to obtain consent under the Overseas Investment Act 2005 and the Overseas Investment Regulations 2005 of New Zealand to own and control all the shares in MCK.
The implementation and payment of the offer is 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.