Singapore's City Developments Ltd. and the independent nonexecutive directors of U.K-based Millennium & Copthorne Hotels Plc agreed to a cash offer price of 552.5 pence per share for all outstanding ordinary shares in the latter that City Developments and its subsidiaries do not already own.
The price values Millennium & Copthorne's entire issued ordinary share capital at approximately £1.79 billion.
The offer price, made by City Developments subsidiary Agapier Investments Ltd., reflects a roughly 23.7% premium to the 446.7 pence closing price per Millennium & Copthorne share on Aug. 18, the last business day prior to the date Millennium & Copthorne received City Developments' initial proposal; a roughly 22.0% premium to the volume-weighted average share price of 452.7 pence per Millennium & Copthorne share for the one-month period before Oct. 6, the last business day prior to the price announcement; and an approximately 21.4% premium to the 455.0 pence per share closing price of Millennium & Copthorne shares, as at Oct. 6.
The offer comprises a cash consideration of 545 pence per Millennium & Copthorne share, along with a special dividend of 7.5 pence per share, payable to shareholders upon the offer becoming wholly unconditional.
The independent nonexecutive directors, excluding City Developments' appointees to the board, formed an independent committee to evaluate the offer. The directors were advised by Credit Suisse and consider the offer to be "fair and reasonable." They plan to unanimously recommend the offer to shareholders following the finalization of certain terms and conditions.
City Developments plans to retain Millennium & Copthorne's current business model and will run the business as an owner and operator of its hotel portfolio. In addition, City Developments said it does not intend to sell or repurpose Millennium & Copthorne's London or New York hotels.
City Developments indirectly holds a roughly 65.20% stake in Millennium & Copthorne, equivalent to 211,749,487 ordinary shares of the latter, as at Oct. 9. City Developments is required to announce a firm intention to make an offer latest by 5 p.m., Nov. 6.
Deutsche Bank and HSBC Bank Plc are serving as joint financial advisers to City Developments, while Credit Suisse International is acting as financial adviser and corporate broker to Millennium & Copthorne.