CDL is planning to take over New Zealand-listed Millennium & Copthorne Hotels New Zealand Limited (MCK) through its subsidiary, CDL Hotels Holdings New Zealand Limited (CDLHH NZ), at a price of NZ$2.25 ($1.72) per share. The board of directors of MCK has recommended that its shareholders accept this offer in a notice of intention filed on Jan 20.
After the completion of the offer, CDL will delist and privatise MCK, simplifying the ownership structure of its New Zealand entities. MCK currently owns, leases or franchises 18 hotels in New Zealand and has interests in properties in Australia through its Kingsgate Group subsidiaries.
As of Jan 17, CDLHH NZ held 80.02 million shares in MCK, representing a 75.86% stake. If it reaches the compulsory acquisition threshold, CDLHH NZ will acquire all remaining shares in MCK. It may also redeem MCK’s non-voting redeemable preference shares at NZ$1.70 or approximately $1.30 per share through its broker, Craigs Investment Partners.
CDLHH NZ currently holds 91.34% of MCK’s non-voting redeemable preference shares. If all MCK shareholders accept the offer, CDLHH NZ will pay a total of NZ$57.29 million. An additional NZ$7.77 million may be paid for the redeemable preference shares it intends to acquire. The offer price was determined based on market price, industry and business environment, as well as MCK’s NAV and NTA of NZ$532.02 million and NZ$85.62 million respectively for the 1HFY2024 ended June 30, 2024.
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The offer is subject to CDLHH NZ getting 90% or more of the voting rights in MCK by May 2, as well as obtaining consent under the Overseas Investment Act and Regulations of New Zealand. The implementation and payment of the offer is not expected to significantly impact CDL’s EPS or NTA for the financial year ending December 31, 2025.