Singapore – 19 December 2017 –
Kwek Leng Beng, the Singaporean billionaire attempting to take over Millennium & Copthorne Hotels, defended his bid after a group of investors argued it was too low and sought to block the deal.
The chairman of City Developments Limited (CDL), which has offered to buy out minority investors in the FTSE 250 hotelier for 620 pence a share, urged M&C shareholders in a letter “to consider the very material premium and value” of its bid, Reuters reported.
Three minority investors in the hotel chain last week rejected CDL’s offer for the 34.8 percent of M&C it does not already own.
International Value Advisers, MSD Partners, and Classic Fund Management urged other investors to join them and block the bid, arguing that the offer, which values the business at 2 billion pounds (US$2.68 billion), fundamentally undervalued the hotelier.
The three investment firms, which represent about 37 percent of the shares targeted by CDL, said the bid failed to reflect the value of the hotelier’s property portfolio.
Kwek said the investment firms’ argument was “somewhat disingenuous” and based on “the false premise of unrealised real estate value”.
“The CDL board sincerely hopes that the actions of a few shareholders who have entered since the financial crisis will not preclude a number of long-term shareholders from being able to take advantage of this offer to exit from their holding in an illiquid stock at a real and significant premium,” Kwek said in the letter.
M&C is behind 137 hotels around the world, which it either owns, operates, invests in, or franchises.