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CDL gains most in more than 3 years after fresh bid for Millennium & Copthorne Hotels

CDL gains most in more than 3 years after fresh bid for Millennium & Copthorne Hotels

File photo of an M&C hotel. (Photo: Millennium & Copthorne Hotels )

SINGAPORE: City Developments Ltd's (CDL) gains rose the most in more than three years on Monday (Jun 10) as investors reacted to the announcement that it had made a fresh bid for Britain's Millennium & Copthorne (M&C) Hotels.

Shares of the real estate firm jumped 5.9 per cent - its largest single daily increase since Dec 16, 2015 - to close at S$8.97. This is its highest close since Mar 26 this year.

CDL, which owns about 65.2 per cent of M&C, said on Friday it will buy the rest of M&C that it does not own, in a deal valuing the London-listed company at £2.23 billion (S$3.9 billion).

The deal comes a year after the minority shareholders of M&C blocked a takeover bid by CDL on the grounds that it did not reflect the value of the company’s property portfolio.

CDL has now received irrevocable undertakings to accept the offer from key minority shareholders, who own about 43.6 per cent of the M&C shares not already held by CDL, the Singaporean company said.

RHB said on Monday that CDL's move to take over M&C is a "long-term positive" that should help it better reposition its ageing hotel assets.

OCBC Investment Research added that it believes thr conditions have changed since the last offer and that it sees a potential upside to CDL's fair value estimate should the privatisation exercise be successful.

Source: CNA/reuters/aj

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