A trio of shareholders in hotelier Millennium & Copthorne are trying to derail what they call a “low-ball” offer for the company by its majority owners.
International Value Advisers, MSD Partners and Classic Fund Management have said they will not offer their shares up for sale to Singapore’s City Developments, which owns 65.2pc of the company and wants to take it private.
The investors own 37pc of the shares which City Developments doesn’t already own and are urging other shareholders to support their stance. City Developments needs the owners of just over 50pc of the outstanding shares to agree to sell their stakes to get the deal done.
City Developments, which is part of the Hong Leong Group owned by Millennium’s chairman, the billionaire Kwek Leng Beng, raised its offer to £2bn this month from the £1.8bn approach it made in October. At 620p a share the revised bid, which represents a final offer and so cannot be increased, is a nearly 39pc premium to the 446p share price prior to the approach being made public.
But the three investors have urged other shareholders not to back the takeover claiming even the higher bid “significantly undervalues” the business.
It also criticised the offer as “nonsensical and highly troubling” given City Developments had tried to play down the importance of the value of the hotels Millennium owns even though it had previously been quoted about its “great frustration” that the share price did not reflect this.
They added that, in spite of shareholders expressing concern about the level of the offer since the initial October bid, the company’s independent committee – separate to the board because City Development’s strong presence on that body had “persisted in recommending a low-ball offer”.
The letter also called for Millennium & Copthorne to publish the value of its hotel assets annually, claiming the company had stopped making this information public after its 2014 annual report.
Millennium & Copthorne said its independent committee would consider the letter and “respond accordingly”. City Developments declined to comment.