City Developments Limited has failed in its bid to acquire 100% of the shares of owner-operator Millennium & Copthorne Hotels New Zealand, which is listed on the New Zealand Stock Exchange under the initials MCK.
CDL is MCK’s majority shareholder.
An announcement and statement on the NZSE, both released on May 9, said CDL’s bid to acquire the “ordinary shares in MCK for $2.80 New Zealand dollars ($1.66) per share closed” at the end of trading on May 8.
CDL made its intentions first known in January to acquire the 24% of MCK it did not already own. But the bid failed to receive the 90% threshold required that would permit it to acquire the remaining ordinary shares, according to a release from Millennium & Copthorne.
The Singaporean hotel investment firm said during its bid it received further “acceptances in respect of 8.054% of the ordinary shares on issue in MCK, taking its total holding of the ordinary shares to 83.915%.”
Bloomberg reported the offer would have valued the shares at approximately 71 million New Zealand dollars ($42 million).
On April 22, following a first rejection by shareholders, CDL increased its per-share offer from NZ$2.25 to NZ$2.80, stating in a letter that would be its final pricing in the matter.
According to Bloomberg, the offer would have valued the remaining 24% of shares at approximately NZ$71 million, which would have given MCK an overall value of approximately $175 million.
CDL also said it would not instigate any future takeover bids, if it chooses to, for nine months starting on April 22, 2025.
Singapore newspaper The Straits Times reported an email from MCK’s largest institutional investor — the New Zealand state-owned insurance firm Accident Compensation Corp. — which cautioned its shareholders that in its opinion the offer highlighted “cyclically low earnings and acquisitions [that] appear to be value destructive.”
MCK has 19 hotels — owned, leased and franchised — under its brands Copthorne, Kingsgate, Grand Millennium, Millennium and M Social. Its properties include the 109-room Copthorne Auckland City, 190-room M Social Hotel Auckland and 220-room Millennium Queenstown.
In March, a public feud at CDL erupted between executive chairman Kwek Leng Beng and his son, CEO Sherman Kwek, over what the father saw as a “attempted coup to control CDL’s board.”
That dispute was settled but not until after the company took the step to suspend trading in the firm’s shares on the Singapore Exchange.
In April 2024, CDL via its division Copthorne Hotel Holdings acquired the 268-room Hilton Paris Opéra for €240 million ($271 million).
