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Dear MCK Shareholder,
On 10 February 2025, CDL Hotels Holdings New Zealand Limited ("CDLHH NZ"), a subsidiary of Singapore Stock Exchange listed City Developments Limited ("CDL"), made a full offer under the Takeovers Code to purchase all of the fully paid ordinary shares in Millennium & Copthorne Hotels New Zealand Limited ("MCK") not already held by CDLHH NZ ("Offer"). You should have received electronically or by mail an offer document for the Offer and a personalised acceptance form that you can use to accept the Offer. The letter sent to shareholders announcing the Offer is below.
The Offer is now unconditional as all conditions relating to the Offer have been satisfied and/or waived by CDLHH NZ. CDLHH NZ has also increased the Offer price (the "Offer Price") from $2.25 per ordinary share in MCK to $2.80 per ordinary share. The increased Offer Price applies to acceptances of the Offer before and after the 22 April 2025 (being the date the Offer Price was varied) and CDLHH NZ intends to make payment in cash in respect of acceptances received prior to 22 April 2025 (being the date of the Offer becoming unconditional), and will promptly make payment in respect of acceptances received on or after 22 April 2025.
The revised Offer Price represents a:
CDL wishes to reiterate to the shareholders of MCK that trading in the ordinary shares of MCK is highly illiquid, with a three-year average daily trading volume of approximately 6,300 shares1.
A key motivation for the Offer is to provide shareholders with liquidity that may not otherwise be available, offering an opportunity to sell shares (without brokerage costs) at a premium over the trading price prevailing at the time the Notice of Intention was issued1.
CDL disputes the view on value and underlying approach taken by Northington Partners in its independent advisor's report ("IAR"). We consider the IAR to be theoretical and not reflective of a practical or reasonable outcome for MCK’s minority shareholders.
CDL intends to continue to generate profit through hotel assets and does not intend to divest or 'wind-up' the portfolio assets. MCK has historically traded at a material discount to its net book value over the last 10 years.
CDL already has control of MCK, which allows, among other things, the ability to change MCK’s constitution, appoint new board members, and influence or change MCK’s strategy including decisions on operating expenditure, capital expenditure, capital structure and dividend policy, recognising the rights of minority shareholders.
Accordingly, $2.80 is the final and best price that CDLHH NZ is willing to pay under the Offer. CDLHH NZ will not vary the Offer Price again and will not make a subsequent takeover offer under the Takeovers Code for the ordinary shares in MCK within nine months from 22 April 2025.
Shareholders holding 2.633% of the ordinary shares of MCK have agreed to accept the Offer if CDLHH NZ increases the Offer Price to $2.80 per ordinary share.
CDL reiterates that it considers the Offer to be a fair and reasonable outcome for MCK’s minority shareholders and encourages you to accept the Offer as soon as possible, which is scheduled to close at 5.00pm on 8 May 2025.
For and on behalf of
City Developments Limited
Sherman Kwek Eik Tse
Group Chief Executive Officer
1 Reference date of 17 January 2025