Millennium & Copthorne rejects CDL’s revised offer to buy outstanding stake

29th April 2025 By Staff Reporter | news@propertyticker.co.nz | @propertyticker

Millennium & Copthorne Hotels New Zealand Limited’s independent directors have recommended shareholders reject the latest offer from CDL Hotels Holdings New Zealand Limited.

CDL raised its offer last week to $2.80 per share, up from the previous offer of $2.25, to buy the remaining circa 24% of the hotel owner-operator that it does not yet own.

Millennium & Copthorne’s independent directors listed five reasons why shareholders should not accept the offer:

• “The increased offer price of $2.80 per ordinary share is still significantly below the independent adviser’s assessment of value for the ordinary shares. The independent adviser has assessed a value range of $4.40 to $5.00 per ordinary share, with a midpoint of $4.70 per ordinary share.
• “The timing of the increased offer still significantly discounts the benefits to the company that shareholders can expect as the hotel and property markets recover.
• “The increased offer still undervalues recent capital expenditure on key hotels.
• “The increased offer is still at a material discount to the market value of MCK’s net assets and significantly undervalues the $129.5m of recent acquisitions made by MCK. These assets were acquired at market values, with the acquisitions supported at the MCK Board by the two CDLHH NZ representative directors.
• “The increased offer still does not appropriately value the benefits that could be captured by CDLHH NZ.”

However, shareholders were also advised to consider the consequences of not accepting the offer, particularly if CDL did not achieve the 90% compulsory acquisition threshold.

Millennium & Copthorne said there were reasons shareholders may consider accepting CDL’s offer. Those reasons the potential for a lower trading price, decreased liquidity, and uncertainty about future takeover offers or pricing.

“Given these potential consequences, some holders of ordinary shares may see the increased offer as an opportunity to exit their investment in MCK at a known price (without brokerage costs), despite this being lower than the value of ordinary shares assessed by the independent adviser,” stated the company.

The increased offer period is open until 5pm on 8 May 2025.