Brokers' take: Analysts keep 'buy' on CDL's plans for potential M&C bid
ANALYSTS are giving an early thumbs-up for City Developments' (CDL) potential privatisation of its London-listed hospitality arm.
Maybank Kim Eng maintained its "buy" recommendation for CDL and its target price of S$11.75, following news on a possible cash offer for London-listed Millennium & Copthorne Hotels (M&C).
OCBC Investment Research also maintained its "buy" call with a fair-value estimate of S$12.90.
CDL announced on Monday that it had negotiated a cash takeover price of 552.5 pence per M&C share, including a 7.5 pence per share special dividend, at which M&C's independent directors would support the offer. CDL currently owns about 65.2 per cent of M&C.
Maybank said that CDL could "potentially unlock value in the asset-rich company in the medium term.
Buying out all of M&C's minority shareholders could cost CDL about S$1.1 billion, which should not be a problem for CDL's S$3.3 billion of cash and 0.18-times net gearing, Maybank Kim Eng said.
Factors which could negatively impact the sale include a sharp fall in home prices, poor execution of overseas projects and a sharp increase in interest rates, which could impact demand for properties.
OCBC noted that the offer priced seemed "attractive", and reckoned that "a full consolidation of M&C on these terms will be accretive for the group".
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Companies & Markets
European oil giants consider shifting their listings to the US
ExxonMobil sees Hess arbitration dragging into 2025, CEO says
Gold prices tick higher on US rate cut bets
Nomura targets 20% revenue growth from global markets business
FLCT posts 1.1% lower H1 DPU of S$0.0348 on higher vacancies, expenses
Singapore shares rise at Tuesday’s open tracking global rally; STI up 0.2%