CDL will not extend offer for M&C beyond Jan 26

CITY Developments (CDL) said on Wednesday that it will not extend the deadline for its offer to privatise London-listed Millennium & Copthorne Hotels (M&C) if there are insufficient acceptances for the bid to turn unconditional by Jan 26.

The acceptance condition requires valid acceptances of the final offer of more than 50 per cent of the M&C shares not already owned by CDL.

Last month, CDL raised its offer price to acquire the remaining stake in M&C that it does not yet own to 620 pence per share, up from 552.5 pence earlier. CDL currently holds 65.2 per cent of M&C.

The final offer represents a premium of about 36.3 per cent to the closing price of M&C shares of 455 pence on Oct 6, the last business day before the start of the offer period. The first closing date remains 1.00pm (London Time) on Jan 23.

CDL said: "Given the CDL Group owns approximately 65.20 per cent (of M&C), CDL believes that there is little possibility of any third-party offeror emerging and hence the final offer is likely to be the only liquidity event that offeree shareholders will have the opportunity to benefit from in the near to medium term in an illiquid stock."

It also highlighted that M&C faces multiple challenges and a competitive landscape, requiring significant capital investment which could adversely affect M&C's earnings.

It added: "The final offer creates a period of uncertainty for both CDL and the offeree which is in neither CDL's nor the offeree's interests. In particular, CDL believes that the full offeree board should be provided with an appropriate period to consider the offeree's medium-term investment needs and capital distribution policy in advance of announcing its preliminary results for the year ended Dec 31, 2017, due to be released in February 2018, with clarity on the ownership structure and listing status."