City Developments Limited (CDL), a developer controlled by Singaporean billionaire Kwek Leng Beng, is considering making an offer for the 35% of shares it does not already own in London-listed Millennium & Copthorne Hotels.
The proposed offer would be 552.5 pence in cash for each share, representing a 21% premium on the hotel group's closing share price on 6 October. This would value the entire Millennium & Copthorne (M&C) business at £1.8 bn (€2 bn).
M&C Group operates hotels in the UK, Europe, the US, Asia and the Middle East. The company's independent directors, excluding CDL's nominees, have indicated they would recommend the offer, which was evalued as 'fair and reasonable' by independent financial adviser Credit Suisse.
Kwek Leng Beng's Hong Leong group acquired the hotel chain from Irish airline Aer Lingus in 1995. M&C was listed in London in 1996 and CDL currently owns about 65% of the issued shares.
CDL said that it intended to maintain M&C’s current business model, in particular to run the business as an owner and operator of its hotel portfolio. CDL also confirmed it had no intention to sell or repurpose any of M&C’s hotels in London or in New York.
The Singaporean-based developer stressed the takeover was dependent on a number of conditions and there was no certainty that a formal offer would be made. A decision on the offer will be announced by the end of the day on 6 November.
In February this year, CDL acquired the freehold Ransomes Wharf site in the Battersea district of London for a luxury residential project with a gross development value of £222 mln (€258 mln).
