Cdl Offers Privatise Millennium Copthorne Hotels New Zealand 172 Share
A subsidiary of City Developments Limited (CDL), CDL Hotels Holdings New Zealand Limited (CDLHH NZ), has announced an offer of NZ$2.25 ($1.72) for all the remaining shares of New Zealand-listed Millennium & Copthorne Hotels New Zealand Limited (MCK). This offer will effectively give CDL full ownership of MCK.
Once the offer is completed, CDL intends to delist and privatize MCK, which will simplify the ownership structure of the group’s New Zealand entities, according to a filing on Jan 20.
Currently, MCK owns, leases or has under franchise 18 hotels in New Zealand. It also has a majority stake in CDL Investments New Zealand Limited and has interests in properties in Australia through its subsidiaries in the Kingsgate Group.
As of Jan 17, CDLHH NZ holds 80.02 million shares in MCK, representing a 75.86% stake based on 105.48 million MCK shares in issue. If it reaches the threshold for compulsory acquisition under the New Zealand takeovers code, CDLHH NZ will acquire all outstanding shares in MCK, and may also redeem its non-voting redeemable preference shares.
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The offer price for MCK’s shares and redeemable preference shares was determined based on market price as well as the industry and business environment. MCK had a net asset value (NAV) of NZ$532.02 million and a net tangible asset value (NTA) of the same for the 1HFY2024 ended on June 30, 2024. The NAV and NTA attributable to the MCK shares subject to the offer are approximately NZ$85.62 million each as of June 30, 2024.
The offer is subject to certain conditions, including CDLHH NZ receiving 90% or more of the voting rights in MCK by 5pm on May 2. It also requires consent under the Overseas Investment Act 2005 of New Zealand and the Overseas Investment Regulations 2005 of New Zealand for CDLHH NZ to own and control all the shares in MCK.
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.
