Millennium & Copthorne Goes Private…or doesn’t!

Date: December 2017 – updated February 2018

Location: 130 hotels in 17 countries, including 21 hotels in the UK.

Name: Millennium & Copthorne Hotels

Deal: After some initial dissent, CDL (previously owners of 62.5% of the shares in this UK listed company) have now struck a deal to acquire the balance of the shares at £6.20 a share, having previously offered £5.45 a share, valuing the company at around £2 billion, thus taking the company back into private hands, as part of Kwek Leng Beng’s Hong Leong Group.

In February 2017 M&C reported revenue, in constant currency, flat at £847m during 2016.
Total revenue grew by 9.3% to £926m.

Global group revenue per available room (RevPAR) for the year decreased by 2.3% to £76.71, mainly due to challenging conditions in the group’s gateway cities and disruption from refurbishment.

In Europe, London performed significantly better than the rest of Europe with occupancy up 1.7 percentage points to 81.9%, compared with 72.7% (down 0.5 percentage points) across the rest of the continent.

Revpar in London was 1.4% down to £107.18, while in the rest of Europe it was £52.61 (down 1.6%), while average room rate in the capital and rest of Europe was £130.83 (down 3.5%) and £72.86 (down 1%) respectively.

But in February 2018…. 

Minority shareholders of Millennium & Copthorne Hotels (M&C) have rejected a bid from the majority stakeholder to acquire the reminder of shares in the global business.

The M&C independent committee allowed the bid from Singapore-based City Developments Limited (CDL), which owns 65.2% of the company, to lapse on Friday, despite recommending minority shareholders accept the offer.

Under the terms of the final offer, CDL, headed by chairman Kwek Leng Beng, made a cash offer for the business valuing each share at 620p each.

The independent committee, which was approached by CDL in August 2017 and initially rejected two proposed offers. However, it later accepted the final offer of 620p per share and recommended that it be accepted by minority shareholders, which was then rejected.

M&C will now remain as a listed company with CDL continuing as the controlling shareholder.

THPT Comment: Would being private allow them to reinvest more money into refurbishment of the hotels?

First Seen: Hotel Analyst and The Caterer