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CDL chairman urges shareholders to accept revised offer of 620 pence a share

IN light of City Developments' (CDL) improved offer to minority shareholders to take London-listed Millennium & Copthorne Hotels (M&C) private on 9 Dec, CDL's chairman Kwek Leng Beng has written a letter to shareholders of M&C urging them to accept a revised offer of 620 pence a share.

The revised offer came on the back of criticism CDL faced following its initial offer of 552.5 pence per share from some of M&C's smaller shareholders, who said that the offer did not reflect the value of M&C's extensive property portfolio.

In a letter to shareholders, Mr Kwek said: "The CDL board recognises that it is the right of every shareholder to choose whether or not to accept the final offer."

Mr Kwek added that should the final offer for M&C shares not be accepted by minority shareholders, the property group would be prepared to address the challenges facing the hotel industry, adding that all shareholders would share the costs of capital expenditure that "is required simply to bring the M&C hotels into line with their competitors".

However, "the CDL board would urge shareholders to consider the very material premium and value that is available to them under this final offer, rather than the false premise of unrealised real estate value that the CDL board does not believe can be practically delivered," he said.

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CDL, which already owns 65.2 per cent of M&C, has said that it will only go through with the privatisation if it gets acceptances of more than 50 per cent from the rest of M&C's shareholders, not counting the shares CDL owns.

This offer, which CDL said is final and will not be raised further, values M&C at about £2.01 billion (S$3.62 billion), compared with the previous valuation of £1.8 billion.

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