Singapore-based City Developments, a majority owner of UK hotel group Millennium & Copthorne Hotels, has bid approximately £1.8 billion to acquire the remaining stake of the company through its firm Agapier Investments.
Millennium & Copthorne has reportedly struggled with building RevPAR in recent years, dropping 2.3 percent on a constant currency basis in 2016. (During the same period, IHG’s RevPAR increased by 1.8 percent.) Millennium stock was down 10 percent in the past five years prior to the bid announcement. The company's shares were originally sold at £6.49, up 0.34 percent before halt on selling the shares on Monday, Oct. 9, 2017.
The Hong Leong Group subsidiary has offered Millennium & Copthorne shareholders 552.5 pence in cash for each share at a premium of approximately 21.4 percent to M&C's closing share price on Friday, Oct. 6, 2017. CDL is also offering a special dividend of 7.5 pence per share payable to all of M&C's shareholders upon the offer becoming unconditional. This has caused stock to increase more than 21 percent and over above the offer price to 553 pence. According to the directors of M&C, the terms of the bid are fair and reasonable. CDL currently owns a 65.2 percent stake in the hotel group.
CDL has planned to maintain M&C's business model and become the owner and operator of its properties. However, the company will not sell or repurpose any of the hotels in London or in New York.
Singapore's Kwek Leng Beng, chairman of Hong Leong Group, established Millennium & Copthorne following the acquisition of Copthorne Hotels from Aer Lingus. M&C's portfolio is spread across Europe, the U.S., the Middle East and Asia. Two of the group's properties are the Millennium Hotel in London's Mayfair and M Social Singapore, which was designed by Philippe Starck.