A group of minority investors in Millennium & Copthorne Hotels Plc rejected a takeover offer from City Developments Ltd. and urged fellow investors to do the same to defeat the final £6.20-per-share bid.
City Developments recently upsized its offer for Millennium & Copthorne, valuing the target at approximately £2.01 billion.
International Value Advisers LLC, MSD Partners LP and its affiliates, and Classic Fund Management AG said in a letter to Millennium & Copthorne's independent directors that they will not tender their shares in the "highly opportunistic" and "unattractive offer" by City Developments, which "significantly undervalues" Millennium & Copthorne.
The three investment firms, which represent roughly 37% of the shares targeted in the bid, argued, among other things, that Millennium & Copthorne has "excellent prospects" as a stand-alone business and should seek to maximize shareholder value by improving its operational performance and capital allocation rather than continuing to recommend "a low-ball offer."
The investors also voiced concerns over the company's "continued lack of meaningful representation" of independent shareholders and criticized its attempt to play down the significance of asset value, labeling the effort "nonsensical and highly troubling."