A trio of shareholders in hotelier Millennium & Copthorne are attempting to derail what they dub as a “low-ball” offer for the company by its majority owners.
International Value Advisers, Classic Fund Management and MSD Partners have said that they will not offer their shares up for sale to City Developments of Singapore, which owns 65.2pc of the company and aims to take it private.
The investors own 37pc of the shares which City Developments does not already own and are asking other shareholders to back their stance. City Developments requires the owners of just more than 50pc of the outstanding shares to agree to sell their stakes in order to get the deal done.
This month, City Developments, which is part of the Hong Leong Group that is owned by billionaire Kwek Leng Beng, the chairman of Millennium, increased its offer to £2bn from the £1.8bn approach that it made in October. At 620p per share, the revised bid, which represents a final offer that cannot be increased, is almost a 39pc premium to the 446p share price before the approach being made public.
However, the three investors have asked other shareholders not to support the takeover claiming that even the higher bid “significantly undervalues” the business.
It also criticised the said offer as “nonsensical and highly troubling” given that City Developments had attempted to play down the significance of the value of the hotels that Millennium owns even though it had earlier been quoted regarding its “great frustration” that the share price was not able to reflect this.
The trio added that in spite of shareholders expressing their concern regarding the level of the offer since the initial bid in October, the independent committee of the company which is separate to the board due to the strong presence of City Development on that body had “persisted in recommending a low-ball offer.”
The letter also requested for Millennium & Copthorne to annually publish the value of its hotel assets, claiming that the company had stopped making the said information public after its annual report in 2014.
Millennium & Copthorne said that the company’s independent committee would consider the said letter and would “respond accordingly.” City Developments refused to comment.