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City Developments may make general offer for Millennium & Copthorne

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City Developments Limited (CDL) is offering to take Millennium & Copthorne (M&C) private after negotiations began in August, the company said on Monday.

PROPERTY developer City Developments Limited (CDL) has negotiated a price with its London-listed hotel arm, Millennium & Copthorne (M&C), for a possible general offer (see amendment note) that would price the unit at about £1.8 billion (S$3.2 billion).

The proposed offer would be made up of a cash amount of 545 pence per M&C share, plus a special dividend of 7.5 pence per M&C share. This offer is priced at 23.7 per cent premium to M&C's last closing price of 446.7 pence on Aug 18, which is the last full day of trading for London-listed M&C before negotiations began.

At that price, M&C's independent directors (which excluded CDL appointees on the M&C board) will unanimously recommend an offer by CDL. Those independent directors were advised by independent financial adviser Credit Suisse, which deemed the offer to be fair and reasonable.

CDL has until the business close of Nov 6, 2017 to either make an offer or state that it does not wish to do so. It has reserved its right to make an offer at any time below the negotiated total consideration of 552.5 pence per M&C share.

If it takes control of the company, the current business model of M&C will be maintained and run as an operator of its hotel portfolio, CDL said. The firm also added that it has no intention to sell or repurpose any of M&C's hotels in London or in New York.

As at Oct 9, CDL owns 65.2 per cent of M&C shares.

Trading in CDL's shares resumed at 3pm after being halted. They changed hands at S$11.76 as at 3.05pm, up by 1.4 per cent, or 16 Singapore cents, on the day.

Amendment note: A previous version of this story said that CDL planned to take M&C private. CDL has negotiated a price for all the M&C shares it does not own, but has not said that it plans to take the company private.

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