CDL, a real estate company, has announced that its subsidiary, CDL Hotels Holdings New Zealand Limited (CDLHH NZ), is offering NZ$2.25 ($1.72) per share to purchase all outstanding shares in New Zealand-listed Millennium & Copthorne Hotels New Zealand Limited (MCK). Following the acquisition, CDL plans to delist and take MCK private, aiming to simplify its ownership structure in New Zealand. MCK currently owns, leases, or franchises 18 hotels in New Zealand and has a majority stake in CDL Investments New Zealand Limited, with interests in Australian properties through its subsidiaries.
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As of January 17, CDLHH NZ holds a 75.86% stake in MCK, equivalent to 80.02 million shares, which exceeds the threshold for compulsory acquisition under the New Zealand takeovers code. CDLHH NZ also intends to redeem the non-voting redeemable preference shares issued by MCK at NZ$1.70 (approximately $1.30) per share. This purchase will take place through Craigs Investment Partners, CDLHH NZ’s broker, on the Main Board of the New Zealand Stock Exchange. As of January 17, CDLHH NZ holds a 91.34% stake in MCK’s non-voting redeemable preference shares, or 48.17 million shares.
If all shareholders of MCK accept the offer, CDLHH NZ will pay a total consideration of NZ$57.29 million. Furthermore, CDLHH NZ expects to pay around NZ$7.77 million to acquire all redeemable preference shares. The offer price for MCK’s shares and redeemable preference shares takes into account the prevailing and historical market price, as well as the industry and business environment in which MCK operates.
According to its financial statements for the first half of FY2024, MCK’s net asset value (NAV) and net tangible asset value (NTA) were both NZ$532.02 million. As of June 30, 2024, the NAV and NTA attributable to the shares subject to the offer were approximately NZ$85.62 million each.
The offer is subject to CDLHH NZ obtaining at least 90% of the voting rights in MCK by 5pm on May 2. CDLHH NZ must also obtain consent under the Overseas Investment Act 2005 and the Overseas Investment Regulations 2005 of New Zealand for the acquisition of all MCK shares. The implementation and payment of the offer are not expected to have a significant impact on CDL’s EPS or NTA for the FY2025 ending December 31.