TIDMMLC
RNS Number : 1223U
City Developments Limited
19 October 2017
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH
JURISDICTION
THIS IS AN ANNOUNCEMENT OF A POSSIBLE OFFER UNDER RULE 2.4 OF
THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE"). THIS
ANNOUNCEMENT IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN
OFFER UNDER RULE 2.7 OF THE CODE AND THERE CAN BE NO CERTAINTY THAT
AN OFFER WILL BE MADE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
19 October 2017
POSSIBLE RECOMMED CASH OFFER
for
Millennium & Copthorne Hotels plc ("M&C")
by
Agapier Investments Limited ("Bidco")
(a company indirectly and wholly-owned by City Developments
Limited ("CDL"))
Summary
-- Further to the announcement on 9 October 2017 setting out the
financial terms of a possible offer by Bidco for M&C, the
boards of CDL and Bidco and the independent non-executive directors
of M&C (the "M&C Independent Directors") are pleased to
announce further details of a possible recommended cash offer,
pursuant to which Bidco would acquire the entire issued and to be
issued ordinary share capital of M&C not already held by the
CDL and its subsidiaries (the "CDL Group") (and persons acting in
concert with them) (the "Proposed Offer").
-- Under the terms of the Proposed Offer, M&C Shareholders
would be entitled to receive a cash amount of 545 pence per M&C
Share payable by Bidco (the "Proposed Offer Price") together with a
special dividend of 7.5 pence per M&C Share (the "Proposed
Special Dividend") payable to all M&C Shareholders upon the
Proposed Offer becoming or being declared wholly unconditional.
-- Under the terms of the Proposed Offer, M&C Shareholders
would be entitled to receive in aggregate:
for each M&C Share 552.5 pence in cash
(the "Proposed Offer Consideration").
-- The Proposed Offer Consideration represents:
-- a premium of approximately 23.7 per cent. to the Closing
Price of the M&C Shares of 446.7 pence per M&C Share on 18
August 2017 (being the last Business Day prior to the date on which
an initial proposal was received by M&C from CDL);
-- a premium of approximately 22.0 per cent. to the volume
weighted average price of the M&C Shares for the period of the
month prior to 6 October 2017 (being the last Business Day prior to
the start of the Offer Period) of 452.7 pence per M&C Share;
and
-- a premium of approximately 21.4 per cent. to the Closing
Price of the M&C Shares of 455.0 pence per M&C Share on 6
October 2017 (being the last Business Day prior to the start of the
Offer Period).
-- The M&C Independent Directors, who have been so advised
by Credit Suisse, consider the financial terms of the Proposed
Offer to be fair and reasonable. In providing advice to the M&C
Independent Directors, Credit Suisse has taken into account the
commercial assessments of the M&C Independent Directors.
Accordingly, the M&C Independent Directors intend unanimously
to recommend that M&C Shareholders accept the Proposed Offer,
subject to finalisation of the terms and conditions related to
regulatory clearances (as described below).
-- The background to and reasons for the Proposed Offer by Bidco
are described in detail in paragraph 4 of the full Proposed Offer
announcement, below. The background to and reasons for the M&C
Independent Directors' proposed recommendation are described in
detail in paragraph 6 of the full possible offer announcement,
below.
-- CDL and Bidco are seeking consent from the New Zealand
Overseas Investment Office (the "OIO") to the indirect acquisition
of interests in sensitive land and significant business assets in
New Zealand that would occur if the Proposed Offer takes place and
is successful. CDL and Bidco are working with the OIO in relation
to the likely timetable for obtaining this consent, which will
impact the terms on which any Proposed Offer can be made to
shareholders. Discussions relating to the regulatory clearances the
parties would be required to seek and obtain in relation to the
Proposed Offer, and the related terms of such clearances, are
ongoing between CDL and the M&C Independent Directors.
-- The Proposed Offer would be conditional on, amongst other
things, Bidco securing valid acceptances of the Proposed Offer in
respect of more than 50 per cent. in nominal value of the M&C
Shares not already owned by the CDL Group and of the voting rights
attached to those shares.
-- Upon the Proposed Offer becoming or being declared wholly
unconditional, M&C would apply for de-listing from the Official
List of the UKLA.
-- CDL is an established Singapore-based international property
and hotel conglomerate involved in real estate development and
investment, hotel ownership and management, facilities management
and the provision of hospitality solutions. CDL currently owns and
manages a portfolio of residential and investment properties, with
extensive operations in 97 locations in 26 countries. Shares in CDL
are admitted to trading on the SGX. Bidco is an indirect,
wholly-owned subsidiary of CDL.
-- M&C is an international hotel group which owns, leases,
manages, franchises, invests in and/or operates 137 hotels in 27
countries around the world. The M&C Shares are listed on the
premium segment of the Official List of the UKLA and are admitted
to trading on the Main Market of the London Stock Exchange.
-- As at 18 October 2017 (being the Last Practicable Date), the
CDL Group owns 211,749,487 M&C Shares, representing
approximately 65.20 per cent. of the issued ordinary share capital
of M&C. The Proposed Offer would value the entire issued
ordinary share capital of M&C as at the date of this
announcement at approximately GBP1,794 million.
-- In accordance with Rule 2.6(a) of the Code, CDL is required,
by not later than 5.00 p.m. on 6 November 2017, either to announce
a firm intention to make an offer in accordance with Rule 2.7 of
the Code or to announce that it does not intend to make an offer
for M&C, in which case the announcement will be treated as a
statement to which Rule 2.8 of the Code applies. This deadline can
be extended with the consent of the Panel in accordance with Rule
2.6(c) of the Code.
-- CDL reserves the right to make an offer at any time at a
price below 552.5 pence per M&C Share:
-- if the actual diluted number of shares in M&C is greater
than the assumed number of 325,403,550; or
-- by the amount of any dividend (or other distribution) which
is paid or becomes payable by M&C to its shareholders after the
date of this announcement except for the Proposed Special Dividend,
which the M&C Shareholders will be entitled to receive.
-- There can be no certainty that a formal offer will be made.
The Proposed Offer will be made solely by certain offer
documentation, which will set out the full terms and conditions of
any offer. A further statement will be made as appropriate.
This summary should be read in conjunction with the full text of
this announcement, including the Appendices. Appendix I to this
announcement contains the sources of information and bases of
calculations of certain information contained in this announcement
and Appendix II contains definitions of certain expressions used in
this summary and in this announcement.
Enquiries:
City Developments Limited and
Agapier Investments Limited
Belinda Lee, Head, Investor
Relations & Corporate Communications +65 6428 9315
Deutsche Bank AG
Joint Financial Adviser to CDL +65 6423 8001
Philip Lee +852 2203 8888
Rohit Satsangi +44 (0) 20 7545
Chris Raff 8000
HSBC
Joint Financial Adviser to CDL
Oliver Smith +44 (0) 20 7991
Barry Rose 8888
Millennium & Copthorne Hotels
plc
Jonathon Grech, Group General
Counsel and Company Secretary
Peter Krijgsman, Financial Communications
(Media) + 44 (0) 20 7872
LEI Number: 2138003EQ1O4LZ1JNH19 2444
Credit Suisse International
Financial Adviser and Corporate
Broker to M&C
John Hannaford +44 (0) 20 7888
Stuart Upcraft 8888
Media Enquiries:
For CDL - Tulchan Communications
LLP
Peter Hewer +44 (0) 20 7353
Will Smith 4200
For M&C - Instinctif Partners
Limited
Matthew Smallwood +44 (0) 20 7457
Mark Reed 2020
Linklaters LLP is retained as legal adviser to CDL. Herbert
Smith Freehills LLP is retained as legal adviser to M&C.
Important Notices
Deutsche Bank AG is subject to supervision by the European
Central Bank and by BaFin, Germany's Federal Financial Supervisory
Authority, and is subject to limited regulation in the United
Kingdom by the Prudential Regulation Authority and Financial
Conduct Authority and in Singapore by the Monetary Authority of
Singapore. Details about the extent of Deutsche Bank AG's
authorisation and regulation by the Prudential Regulation
Authority, the Financial Conduct Authority and the Monetary
Authority of Singapore are available on request. Deutsche Bank AG,
acting through its Singapore branch, is acting as financial adviser
to CDL and no-one else in connection with the subject matter of
this announcement and will not be responsible to anyone other than
CDL for providing the protections afforded to its clients or for
providing advice in connection with the subject matter of this
announcement.
HSBC Bank plc, which is authorised by the Prudential Regulation
Authority and regulated in the United Kingdom by the Financial
Conduct Authority and the Prudential Regulation Authority, is
acting as financial adviser to CDL and for no-one else in
connection with the subject matter of this announcement and will
not be responsible to anyone other than CDL for providing the
protections afforded to its clients or for providing advice in
connection with the subject matter of this announcement.
Credit Suisse International ("Credit Suisse") is authorised by
the Prudential Regulation Authority and regulated by the Financial
Conduct Authority and the Prudential Regulation Authority. Credit
Suisse is acting exclusively for the Independent Committee and for
no one else in connection with the Proposed Offer, the content of
this announcement and other matters described in this announcement.
Credit Suisse will not regard any other person as its client in
relation to the Proposed Offer, the content of this announcement
and other matters described in this announcement and will not be
responsible to anyone other than the Independent Committee for
providing the protections afforded to its clients, nor for
providing advice to any other person in relation to the Proposed
Offer, the content of this announcement or any other matters
described in this announcement.
Save for the responsibilities and liabilities, if any, of Credit
Suisse under FSMA or the regulatory regime established thereunder,
Credit Suisse does not assume any responsibility whatsoever and
makes no representations or warranties, express or implied, in
relation to the content of this announcement, including its
accuracy, completeness or verification or for any other statement
made or purported to be made by the Independent Committee, or on
the Independent Committee's behalf, or by Credit Suisse, or on its
behalf, and nothing contained in this announcement is, or shall be,
relied on as a promise or representation in this respect, whether
as to the past or the future, in connection with the Independent
Committee or the Proposed Offer. Credit Suisse disclaims to the
fullest extent permitted by law all and any responsibility and
liability whether arising in tort, contract or otherwise which it
might otherwise be found to have in respect of this announcement or
any such statement.
This announcement is for information purposes only. It is not
intended to and does not constitute, or form part of, an offer to
sell or an invitation to purchase any securities or the
solicitation of an offer to buy any securities, pursuant to the
Proposed Offer or otherwise. The Proposed Offer would be made
solely by means of an Offer Document and the Form of Acceptance
accompanying the Offer Document (or, in the event that the Proposed
Offer would be implemented by way of a scheme of arrangement, a
scheme document) which would contain the full terms and conditions
of the Proposed Offer, including details of how the Proposed Offer
may be accepted.
Bidco reserves the right to elect (with the consent of the
Panel) to implement the acquisition of M&C by way of a
court-approved scheme of arrangement in accordance with Part 26 of
the Companies Act. In such event, the acquisition would be
implemented on substantially the same terms, subject to appropriate
amendments, as those which would apply to the Proposed Offer.
The Proposed Offer would be subject to the applicable
requirements of the Code, the Panel, the London Stock Exchange, the
Financial Conduct Authority and the UKLA.
This announcement does not constitute a prospectus or prospectus
equivalent document.
Overseas Shareholders
The release, publication or distribution of this announcement in
certain jurisdictions may be restricted by law. Persons who are not
resident in the United Kingdom or who are subject to the laws
and/or regulations of any jurisdictions other than the United
Kingdom should inform themselves of, and observe, any applicable
requirements. Any failure to comply with the applicable legal
and/or regulatory requirements may constitute a violation of the
laws of any such jurisdiction. To the fullest extent permitted by
applicable law, the companies and persons involved in the Proposed
Offer disclaim any responsibility or liability for the violation of
such restrictions by any person.
This announcement has been prepared for the purposes of
complying with English law, the Listing Rules, the rules of the
London Stock Exchange and the Code and the information disclosed
may not be the same as that which would have been disclosed if this
announcement had been prepared in accordance with the laws and/or
regulations of jurisdiction outside the United Kingdom.
Unless otherwise determined by Bidco or required by the Code,
and permitted by applicable law and regulation, the Proposed Offer
would not be made, directly or indirectly, in, into or from a
Restricted Jurisdiction where to do so would violate the laws in
that jurisdiction, and the Proposed Offer shall not be capable of
acceptance from or within a Restricted Jurisdiction. Accordingly,
copies of this announcement and all documents relating to the
Proposed Offer are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in,
into or from a Restricted Jurisdiction where to do so would violate
the laws in that jurisdiction, and persons receiving this
announcement and all documents relating to the Proposed Offer
(including agents, custodians, nominees and trustees) must not mail
or otherwise distribute or send them in, into or from such
Restricted Jurisdiction as doing so may invalidate any purported
acceptance of the Proposed Offer. Any person (including, without
limitation, any agent, custodian, nominee and trustee) who would,
or otherwise intends to, or who may have a contractual or legal
obligation to, forward this announcement and/or any document
relating to the Proposed Offer to any jurisdiction outside the UK
should inform themselves of, and observe, any applicable legal or
regulatory requirements of their jurisdiction.
The availability of the Proposed Offer to M&C Shareholders
who are not resident in the United Kingdom may be affected by the
laws of the relevant jurisdictions in which they are resident.
Persons who are not resident in the United Kingdom should inform
themselves of, and observe, any applicable requirements.
If you are a Resident of the United States, please read the
following:
The Proposed Offer would be made for the securities of M&C,
a company incorporated under the laws of England and Wales, and
would be made in the United States in compliance with, and reliance
on, Section 14(e) of the US Securities Exchange Act of 1934 (the
"Exchange Act") and Regulation 14E thereunder. The Proposed Offer
would be made in the United States by Bidco and no one else.
The Proposed Offer would be subject to the disclosure and
procedural requirements of the United Kingdom which are different
from those in the United States.
It may be difficult for United States holders of shares in CDL
or M&C to enforce their rights and claims arising out of the
United States federal securities laws, since CDL, Bidco and M&C
are located in countries other than the United States, and some or
all of their officers and directors may be residents of countries
other than the United States. Holders in the United States may not
be able to sue a non-United States company or its officers or
directors in a non-United States court for violations of United
States securities laws. Further, it may be difficult to compel a
non-United States company and its affiliates to subject themselves
to a United States court's judgement.
Forward Looking Statements
This announcement, including any information included or
incorporated by reference in this announcement, contains statements
about Bidco, CDL and M&C that are or may be forward looking
statements. All statements other than statements of historical
facts included in this announcement may be forward looking
statements. Without limitation, any statements preceded or followed
by or that include the words "targets", "plans", "believes",
"expects", "aims", "intends", "will", "may", "anticipates",
"estimates", "projects" or words or terms of similar substance or
the negative thereof, are forward looking statements. Forward
looking statements include statements relating to the following:
(i) future capital expenditures, expenses, revenues, earnings,
synergies, economic performance, indebtedness, financial condition,
dividend policy, losses and future prospects; (ii) business and
management strategies and the expansion and growth of Bidco's or
CDL's or M&C's operations; and (iii) the anticipated effects of
the Proposed Offer on the Wider CDL Group and the business and
operations of M&C.
Such forward looking statements involve risks and uncertainties
that could significantly affect expected results and are based on
certain key assumptions. Many factors could cause actual results to
differ materially from those projected or implied in any forward
looking statements. Much of the risk and uncertainty relates to
factors that are beyond the companies' abilities to control or
estimate precisely, such as future events, future market conditions
and the behaviours of other market participants. Other unknown or
unpredictable factors could affect future operations and/or cause
actual results to differ materially from those in the forward
looking statements. Such forward looking statements should be
construed in the light of such factors, and therefore undue
reliance should not be placed on such statements.
Each forward-looking statement speaks only as at the date of
this announcement. Neither Bidco nor CDL or M&C, nor any of
their respective associates or directors, officers, employees,
managers, agents, representatives, partners, members, consultants
or advisers: (i) provide any representation, warranty, assurance or
guarantee that the occurrence of the events expressed or implied in
any forward looking statements will actually occur; nor (ii) assume
any obligation to, and do not intend to, revise or update these
forward looking statements, except as required pursuant to
applicable law. Bidco and CDL disclaim any obligation to update any
forward looking or other statements contained herein, except as
required by applicable law. All forward looking statements
contained in this announcement are expressly qualified in their
entirety by the cautionary statements contained or referred to in
this section.
No Profit Forecasts or Estimates
No statement in this announcement is intended as a profit
forecast or estimate for any period and no statement in this
announcement should be interpreted to mean that earnings or
earnings per share for Bidco, M&C or CDL, as appropriate, for
the current or future financial years would necessarily match or
exceed the historical published earnings or earnings per share for
Bidco, M&C or CDL, as appropriate.
Disclosure Requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent. or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the Offer
Period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 pm (London time) on the 10th Business Day following the
commencement of the Offer Period and, if appropriate, by no later
than 3.30 pm (London time) on the 10th Business Day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of
(i) the offeree company, and (ii) any securities exchange offeror,
save to the extent that these details have previously been
disclosed under Rule 8. A Dealing Disclosure by a person to whom
Rule 8.3(b) applies must be made by no later than 3.30 pm (London
time) on the Business Day following the date of the relevant
dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at http://www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the Offer Period commenced and when any offeror was first
identified. If you are in any doubt as to whether you are required
to make an Opening Position Disclosure or a Dealing Disclosure, you
should contact the Panel's Market Surveillance Unit on +44 (0)20
7638 0129.
Electronic Communications
Please be aware that addresses, electronic addresses and certain
information provided by M&C Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from M&C may be provided to Bidco during the
Offer Period as requested under Section 4 of Appendix 4 of the Code
to comply with Rule 2.11(c) of the Code.
Publication on Website and Availability of Hard Copies
In accordance with Rule 26.1 of the Code, a copy of this
announcement, subject to certain restrictions relating to persons
resident in Restricted Jurisdictions, will be available on the
website of CDL at: www.cdl.com.sg/Millennium-Offer and M&C at:
https://investors.millenniumhotels.com/regulatory-announcements-and-news/city-developments-ltd-offer-documents
promptly and by no later than 12 noon (London time) on the Business
Day following this announcement. For the avoidance of doubt, the
contents of these websites referred to in this announcement are not
incorporated into and do not form part of this announcement.
You may request a hard copy of this announcement by contacting
Equiniti Limited on 0371-384-2343 (if calling within the UK) or +44
(0)121-415-7047 (if calling from outside the UK). Lines are open
Monday to Friday 8.30 a.m. to 5.30 p.m., excluding UK Bank
Holidays. You may also request that all future documents,
announcements and information to be sent to you in relation to the
Proposed Offer should be in hard copy form.
Rounding
Certain figures included in this announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH
JURISDICTION
THIS IS AN ANNOUNCEMENT OF A POSSIBLE OFFER UNDER RULE 2.4 OF
THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE"). THIS
ANNOUNCEMENT IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN
OFFER UNDER RULE 2.7 OF THE CODE AND THERE CAN BE NO CERTAINTY THAT
AN OFFER WILL BE MADE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
19 October 2017
POSSIBLE RECOMMED CASH OFFER
for
Millennium & Copthorne Hotels plc ("M&C")
by
Agapier Investments Limited ("Bidco")
(a company indirectly and wholly-owned by City Developments
Limited ("CDL"))
1 Introduction
Further to the announcement on 9 October 2017 setting out the
financial terms of a possible offer by Bidco for M&C, the
boards of CDL and Bidco and the independent non-executive directors
of M&C (the "M&C Independent Directors") are pleased to
announce further details of a possible recommended cash offer,
pursuant to which Bidco would acquire the entire issued and to be
issued ordinary share capital of M&C not already held by the
CDL and its subsidiaries (the "CDL Group") (the "Proposed
Offer").
2 The Proposed Offer
Under the terms of the Proposed Offer, M&C Shareholders
would be entitled to receive a cash amount of 545 pence per M&C
Share payable by Bidco (the "Proposed Offer Price") together with a
special dividend of 7.5 pence per M&C Share (the "Proposed
Special Dividend") payable to all M&C Shareholders by M&C
upon the Proposed Offer becoming or being declared wholly
unconditional.
Under the terms of the Proposed Offer, M&C Shareholders
would be entitled to receive in aggregate:
for each M&C Share 552.5 pence in cash
(the "Proposed Offer Consideration").
The Proposed Offer Consideration represents:
-- a premium of approximately 23.7 per cent. to the Closing
Price of the M&C Shares of 446.7 pence per M&C Share on 18
August 2017 (being the last Business Day prior to the date on which
an initial proposal was received by M&C from CDL);
-- a premium of approximately 22.0 per cent. to the volume
weighted average price of the M&C Shares for the period of the
month prior to 6 October 2017 (being the last Business Day prior to
the start of the Offer Period) of 452.7 pence per M&C Share;
and
-- a premium of approximately 21.4 per cent. to the Closing
Price of the M&C Shares of 455.0 pence per M&C Share on 6
October 2017 (being the last Business Day prior to the start of the
Offer Period).
The M&C Independent Directors, who have been so advised by
Credit Suisse, consider the financial terms of the Proposed Offer
to be fair and reasonable. In providing advice to the M&C
Independent Directors, Credit Suisse has taken into account the
commercial assessments of the M&C Independent Directors.
Accordingly, the M&C Independent Directors intend unanimously
to recommend that M&C Shareholders accept the Proposed Offer,
subject to finalisation of the terms and conditions related to
regulatory clearances (as described below).
CDL and Bidco are seeking consent from the New Zealand Overseas
Investment Office (the "OIO") to the indirect acquisition of
interests in sensitive land and significant business assets in New
Zealand that would occur if the Proposed Offer takes place and is
successful. CDL and Bidco are working with the OIO in relation to
the likely timetable for obtaining this consent, which will impact
the terms on which any Proposed Offer can be made to shareholders.
Discussions relating to the regulatory clearances the parties would
be required to seek and obtain in relation to the Proposed Offer,
and the related terms of such clearances, are ongoing between CDL
and the M&C Independent Directors.
The Proposed Offer would be conditional on, amongst other
things, Bidco securing valid acceptances of the Proposed Offer in
respect of more than 50 per cent. in nominal value of the M&C
Shares not already owned by the CDL Group and of the voting rights
attached to those shares.
Upon the Proposed Offer becoming or being declared wholly
unconditional, M&C would apply for de-listing from the Official
List of the UKLA.
Other than the Proposed Special Dividend, if any dividend or
other distribution were authorised, declared, made or paid in
respect of M&C Shares on or after the date of this
announcement, the Proposed Offer Price would be reduced by the
amount of any such dividend or other distribution.
The M&C Shares would be acquired under the Proposed Offer
fully paid and free from all liens, charges, equitable interests,
encumbrances, rights of pre-emption and any other rights and
interests of any nature whatsoever and together with all rights now
and hereafter attaching or accruing to them, including, without
limitation, voting rights and the right to receive and retain in
full all dividends and other distributions (if any) declared, made
or paid (other than the Proposed Special Dividend), or any other
return of capital (whether by reduction of share capital or share
premium account or otherwise) made, on or after the date of this
announcement.
M&C Shareholders who are on the register of members of
M&C at 6.00 pm (London time) on the Business Day immediately
prior to the Proposed Offer becoming wholly unconditional would be
entitled to receive the Proposed Special Dividend.
As at 18 October 2017 (being the Last Practicable Date), CDL
holds 211,749,487 M&C Shares through its wholly-owned
subsidiaries Singapura Developments (Private) Limited and Reach
Across International Limited, representing approximately 65.20 per
cent. of the issued ordinary share capital of M&C. The Proposed
Offer values the entire issued ordinary share capital of M&C as
at the date of this announcement at approximately GBP1,794
million.
In accordance with Rule 2.6(a) of the Code, CDL is required, by
not later than 5.00 p.m. on 6 November 2017, either to announce a
firm intention to make an offer in accordance with Rule 2.7 of the
Code or to announce that it does not intend to make an offer for
M&C, in which case the announcement will be treated as a
statement to which Rule 2.8 of the Code applies. This deadline can
be extended with the consent of the Panel in accordance with Rule
2.6(c) of the Code.
CDL reserves the right to make an offer at any time at a price
below 552.5 pence per M&C Share:
-- if the actual diluted number of shares in M&C is greater
than the assumed number of 325,403,550; or
-- by the amount of any dividend (or other distribution) which
is paid or becomes payable by M&C to its shareholders after the
date of this announcement except for the Proposed Special Dividend,
which the M&C Shareholders will be entitled to receive.
There can be no certainty that a formal offer will be made. The
Proposed Offer will be made solely by certain offer documentation,
which will set out the full terms and conditions of any offer. A
further statement will be made as appropriate.
3 M&C Independent Directors
The M&C Independent Directors, which excludes the appointees
of CDL to the M&C board (such appointees being Kwek Leng Beng,
Kwek Leng Peck and Kwek Eik Sheng), have established an Independent
Committee to which has been delegated the exercise of all powers of
the M&C board in relation to the Proposed Offer.
4 Background to and reasons for the Proposed Offer
CDL has been a highly supportive shareholder since M&C's
initial public offering on the London Stock Exchange in 1996.
CDL believes it is in its best interest to maintain M&C's
current business model and work steadfastly towards streamlining
its operations and improving its performance, while also investing
through capital expenditure where required. It should be noted that
CDL has already established a separate business unit in UK to work
independently on its development projects comprising a few UK sites
which CDL has progressively acquired, selectively, since 2013. The
decision to invest resources to establish a standalone UK
residential business was complementary to the strategic intent of
keeping M&C's hotel business intact under its existing owner
operator model. In summary, if CDL wished to convert M&C's
hotel assets to residential it is likely it would have done so much
earlier, and refrained from developing a separate residential
entity in the UK which reports directly in to CDL.
Therefore, CDL believes that keeping both the hotel and
development business operationally separate, is aligned with the
CDL Group's long-term policy and strategy. However, CDL also firmly
believes that keeping these business units under one roof, with
M&C as a wholly-owned, private subsidiary, will afford it
better synergies, control and management efficiency.
In view of CDL's intent to retain an asset ownership model,
coupled with M&C's lack of scale and ability to replicate an
asset-light business model employed by its larger hospitality group
peers, M&C should not be valued based on NAV but rather on its
present and future hotel earnings, which is how the analyst
community has been typically prioritising their assessment of
M&C Shares. The Independent Directors of M&C negotiated
hard and after several rounds of deliberations, CDL is pleased that
good progress has now been made in advancing a possible recommended
cash offer, the financial terms of which both parties believe are
fair and reasonable, and which would provide M&C Shareholders
with the opportunity to exit in a very illiquid market at a
significant premium without continued exposure to the potential
risks and challenges which M&C faces.
CDL believes that M&C currently faces multiple challenges,
including intensifying competition from large-scale/ asset-light
hotel conglomerates, geo-political instability, and technological
disruption. CDL believes that to improve and maintain M&C's
competitiveness, M&C needs to progress its capital expenditure
refurbishment programmes in a number of hotels. This is expected to
be a near-term, ongoing process which CDL believes will likely
further impact M&C's earnings.
CDL believes that M&C's challenges and long-term financial
requirements can be better navigated if the company becomes a
private entity, for which nimbleness and flexibility will be a
distinct advantage in a highly competitive operating environment.
CDL also believes that by providing M&C with direct access to
CDL's larger infrastructure as a diversified, global operating
group, M&C will be able to leverage on CDL's network, financial
resources and its proven execution capabilities to effect a quicker
turnaround at a lower cost.
M&C has articulated over many years a twin strategy as both
a hotel owner and operator. As stated previously, CDL intends to
maintain M&C's business model as an owner and operator of its
hotel portfolio.
M&C's generation of recurring income has been a critical
component of CDL's operating performance for many years as it has
provided a buffer against the volatility and cyclical nature of
CDL's residential development business. Today, recurring income is
even more important as margins on new residential projects are
being reduced due to higher land costs and ongoing property cooling
measures in several key gateway cities. Moreover, CDL is cognisant
that different countries have different rules and restrictions,
taxes and regulatory requirements, as well as different approval
processes which can be overly onerous and time consuming. These can
incur significant costs and carry certain political and economic
risks, thus further discouraging CDL from redeveloping or
repositioning M&C's assets.
For example, as a developer, CDL is acutely aware that the
shortage of affordable housing in London will create pressure to
provide for affordable housing components in future residential
developments (including the proposal to seek 35% of new residential
accommodation to be provided as affordable housing). Whilst CDL
expects this alone will severely impact the financial viability of
any potential redevelopment activities, CDL also notes that several
London boroughs have adopted policies to resist the loss of hotel
accommodation, and any uplift in floor space may be subject to
community infrastructure levies.
Furthermore, for hotels held on a long-term leasehold basis, the
landowner with the reversionary interest would look to extract
significant premia and higher ground rents on any potential
redevelopments.. Moreover, any extension of the hotels beyond their
current building envelope may affect third party rights to light,
resulting in potential injunctions or compensation payments.
Collectively, and irrespective of M&C's attractiveness as a
recurring income portfolio, these factors will continue to
disincentivise CDL from pursuing any residential conversion
strategy.
Similarly, in New York City, CDL notes the moratorium on the
conversion of hotels with more than 150 rooms into condominiums in
order to stem potential job losses from hotel closures is an
impediment to any conversion or repurposing strategy. The
moratorium was imposed in 2015 for two years, and was recently
renewed for a further two years.
In Singapore, residential developers are subject to various
cooling measures imposing escalating levels of taxes on developers.
These include the Qualifying Certificate ("QC") scheme which
imposes a series of penalties on certain developers in Singapore,
including CDL, if they do not complete their development within
five years and do not sell the units within an additional two years
post completion. The QC penalties are equivalent to 8% of the land
value in the first year of extension, increasing to 16% for the
second year, and 24% for the third year and beyond.
These restrictions in the key cities of London and New York, as
well as Singapore, highlight the severe impediments to pursuing a
conversion or repurposing strategy for M&C's hotel assets.
5 Proposed Recommendation
The M&C Independent Directors, who have been so advised by
Credit Suisse, consider the terms of the Proposed Offer to be fair
and reasonable. In providing advice to the M&C Independent
Directors, Credit Suisse has taken into account the commercial
assessments of the M&C Independent Directors. Accordingly, the
M&C Independent Directors intend unanimously to recommend that
M&C Shareholders accept the Proposed Offer subject to
finalisation of the terms and conditions related to regulatory
clearances.
6 Background to and reasons for the M&C Independent Directors' proposed recommendation
CDL listed M&C on the London Stock Exchange in 1996. The
initial 55% shareholding held by CDL in M&C has increased over
time to the 65.2% that it currently owns today. As a controlling
shareholder, CDL has continued to exercise influence over the
strategy of M&C, indeed the Executive Chairman of CDL is also
the Non-Executive Chairman of M&C and has been since
listing.
The Independent Directors were approached by CDL on 21 August
2017 with an offer to take the company private for 510 pence in
cash. This initial offer was rejected outright. CDL subsequently
returned with a revised proposal on 14 September 2017, which was
also rejected. As well as rejecting the second proposal with
respect to value, the Independent Directors sought to better
understand the intentions of CDL with regards to its potential
future ownership of M&C in a private context, specifically as
to whether any attempt would be made to sell or repurpose operating
hotels within the group.
After a period of further negotiation, CDL made a third proposal
of 552.5 pence in cash (including a special dividend of 7.5 pence
per M&C share), conditional inter alia on the recommendation of
the Independent Directors, as well as providing assurances over the
future strategy for the group and its assets.
In considering the Proposed Offer, the Independent Directors
have taken into account both the potential growth and the risks
inherent in the continued execution of M&C's strategy, as well
as the underlying assets of M&C. These factors have been
considered against the certainty of a cash offer at a level that
the Independent Directors believe is unlikely to be seen in the
public markets in the medium-term.
-- The Independent Directors have considered the challenges
M&C faces in the medium term, to address and adapt to changing
market dynamics, as well as implementing and successfully executing
several significant capital expenditure initiatives in multiple
hotel locations. M&C continues to undergo significant
management change, in particular at Chief Executive level.
-- In forming its view on the Proposed Offer, the Independent
Directors have had regard to a number of valuation methodologies to
assess a fair market value of M&C as a hotel operator. The cash
flows of the business have been valued and account has been taken
of the underlying assets of M&C. The Proposed Offer also
represents a premium of approximately 21.4% to the Closing Price
per M&C share of 455 pence on 6 October 2017, which is within
the range of premia paid in other UK take-private transactions
undertaken by controlling shareholders. Whilst an assessment of the
underlying assets of M&C is a relevant reference point, it is
important to note that M&C has traded, and continues to be
valued by the market, primarily on an earnings basis. M&C has
historically traded at a sizeable discount to reported net book
value (defined as total assets less total liabilities and minority
interests, as set out in the M&C annual and quarterly reports)
since the financial crisis of 2008.
-- The Independent Directors have had particular regard to the
prior statements by CDL that it does not intend to change strategy
with respect to asset ownership at M&C. It is not M&C's
strategy to realise value through the sale or repurpose of its
assets. Further, any significant asset disposal would require
shareholder approval. Therefore the Independent Directors believe
that a listed M&C would continue to trade as a hotel owner and
operator and there would be limited opportunity for minority
shareholders to benefit from a sale or repurposing of the assets of
M&C as a listed entity in the medium term, if at all. A sale of
assets also needs to take into account tax and transaction costs,
which can be significant in asset transactions. Nevertheless, the
Independent Directors also engaged a leading property adviser to
review certain key assets in London and New York with a particular
focus on New York assets that are loss making.
-- In response to CDL's statements regarding its proposed future
operating model, the Independent Directors requested a confirmatory
Post-Offer Intention Statement from CDL that it intends to continue
to run M&C as an owner and operator of hotels as a private
company following a successful offer. In particular it does not
intend to sell or repurpose any hotels in New York or London. This
Post-Offer Intention Statement is made under Rule 19.6 of the
Code.
The Independent Directors have concluded, on the basis of the
above, that the Proposed Offer would represent an opportunity for
M&C Shareholders to realise their investment in cash today at a
certain valuation. In addition, since CDL holds a controlling
interest in M&C, the Independent Directors believe it is
unlikely that there would be any third party competing offers for
M&C Shareholders to consider. Accordingly, the Independent
Directors believe the Proposed Offer would represent fair and
reasonable value and intend to recommend unanimously the Proposed
Offer to M&C Shareholders, subject to finalisation of the terms
and conditions related to regulatory clearances.
7 Information on CDL
CDL is an established Singapore-based international property and
hotel conglomerate involved in real estate development and
investment, hotel ownership and management, facilities management
and the provision of hospitality solutions. CDL currently owns and
manages a portfolio of residential and investment properties, with
extensive operations in 97 locations in 26 countries encompassing
Asia, Europe, the Middle East, North America, New Zealand and
Australia.
CDL has developed over 40,000 homes and owns over 18 million
square feet of lettable office, industrial, retail, residential and
hotel space globally. In 2016 CDL achieved revenue of S$3.9 billion
(GBP2.1 billion) and net profit before tax of S$914 million (GBP486
million), with a net asset value of approximately S$9.3 billion
(GBP5.2 billion) as at 31 December 2016.
CDL is a limited company registered in Singapore. Shares in CDL
are admitted to trading on the SGX.
8 Information on Bidco
Bidco is a limited company registered in the British Virgin
Islands. It is an indirect, wholly-owned subsidiary of CDL.
9 Information on M&C
M&C is an international hotel group which owns, leases,
manages, franchises, invests in and/or operates 137 hotels in 27
countries around the world.
M&C is a public limited company registered in England and
Wales. M&C Shares are listed on the premium segment of the
Official List of the UKLA and admitted to trading on the Main
Market of the London Stock Exchange.
10 Management, employees and locations
In the event of the Proposed Offer becoming or being declared
unconditional in all respects, Bidco intends that the existing
employment rights, including pension rights, of the management and
employees of M&C would be fully safeguarded in accordance with
contractual and statutory requirements. Bidco's current plans for
M&C do not involve any material change in the employment of, or
in the conditions of employment of, M&C's employees.
Separately, the M&C Independent Directors have confirmed
that they intend to resign as M&C directors in the event of the
Proposed Offer becoming or being declared wholly unconditional.
Further details of Bidco's strategic plans for M&C and any
impact on its management, employees and locations would be
contained in certain offer documentation that would follow in due
course.
Bidco confirms that it intends to maintain M&C's current
business model, in particular to run the business as an owner and
operator of its hotel portfolio. Bidco also confirms it has no
intention to sell or repurpose any of M&C's hotels in London or
in New York.
11 M&C Share Schemes
Participants in the M&C Share Schemes would be contacted
regarding the effect of the Proposed Offer on their rights under
the M&C Share Schemes and, if the Proposed Offer proceeds,
appropriate proposals would be made to such participants in due
course. Details of such proposals would be set out in the Offer
Document and in separate letters to be sent to participants of the
M&C Share Schemes and are summarised below.
The Proposed Offer would extend to any M&C Shares which are
unconditionally allotted or issued as a result of the exercise of
existing options and vesting of existing awards under the M&C
Share Schemes before the date on which the Proposed Offer
closes.
Awards under the LTIP would not accelerate as a result of the
Proposed Offer, and instead would remain outstanding and capable of
vesting on their normal vesting dates. Awards under the ABP and ESP
would accelerate and vest as to a time pro-rated proportion on the
Proposed Offer becoming or being declared wholly unconditional, and
the remaining proportion of these awards would remain outstanding
and capable of vesting on their normal vesting dates. Consideration
would be given to adjusting the terms of the awards which remain
outstanding as appropriate in light of these awards continuing
after the Proposed Offer becomes or is declared wholly
unconditional. On vesting, either on or after the Proposed Offer
becoming or being declared wholly unconditional, participants in
the LTIP, ABP and ESP would receive a payment in lieu of the
Proposed Special Dividend by reference to each M&C Share in
respect of which the awards vest.
Options under the all employee Sharesave Plans would become
exercisable in accordance with their terms in the event that
M&C Shares become the subject of a compulsory purchase process
pursuant to the provisions of Chapter 3 of Part 28 of the Companies
Act, as described in paragraph 16 below. Participants would then be
entitled to accept the Proposed Offer in respect of the M&C
Shares acquired on exercise. Bidco has also agreed that in such
case participants may be compensated in respect of losing the
opportunity of being able to continue saving under these
arrangements as a result of early exercise. In the event that
M&C Shares do not become the subject of a compulsory purchase
process pursuant to the provisions of Chapter 3 of Part 28 of the
Companies Act, options under the Sharesave Plans would continue to
remain outstanding until their normal maturity dates, subject to
their terms. In either case, subject to the Proposed Offer becoming
or being declared wholly unconditional, participants would also
receive a payment in lieu of the Proposed Special Dividend in
respect of any M&C Shares acquired after the record date of the
Proposed Special Dividend pursuant to the exercise of options under
the Sharesave Plans.
ABP and ESP awards which vest on or after the Proposed Offer
becomes or is declared wholly unconditional would be settled in
cash calculated by reference to the Proposed Offer Price.
Any vesting or exercise of awards or options under the LTIP and
Sharesave Plans after the Proposed Offer becomes or is declared
wholly unconditional may be satisfied by newly issued M&C
Shares. Any M&C Shares issued after the Proposed Offer ceased
to be capable of acceptance would, pursuant to an amendment to the
M&C articles of association which Bidco would implement as soon
as practicable following the Proposed Offer becoming or being
declared wholly unconditional, be immediately transferred to Bidco
in consideration of a cash payment calculated by reference to the
Proposed Offer Price. Any vesting of awards under the LTIP may,
alternatively, be settled in cash calculated by reference to the
Proposed Offer Price.
12 Conditions to the Offer
The Proposed Offer would be subject to certain conditions, which
include:
(i) the granting of consent under the New Zealand Overseas
Investment Act 2005 and/or receipt of applicable exemptions in
accordance with the New Zealand Overseas Investment Regulations
2005 by the New Zealand Overseas Investment Office for the indirect
acquisition of interests in sensitive land and sensitive business
assets in New Zealand that would occur as a result of the Proposed
Offer;
(ii) Bidco securing valid acceptances of the Offer in respect of
more than 50 per cent. in nominal value of the M&C Shares not
already owned by the CDL Parties and of the voting rights attached
to those shares; and
(iii) the granting by the Takeovers Panel of New Zealand of an
unconditional exemption from the requirements of rule 6(1) of the
New Zealand Takeovers Code.
13 Reserving the right to proceed by Scheme
Bidco reserves the right to elect, with the consent of the Panel
(where necessary), to implement the Proposed Offer by way of a
Scheme. If Bidco elected to implement the Proposed Offer by way of
a Scheme, that Scheme would be implemented on the same terms
(subject to appropriate amendments), so far as applicable, as those
which would apply to the Proposed Offer.
14 Compulsory acquisition, de-listing and re-registration
If Bidco received acceptances under the Proposed Offer in
respect of, and/or otherwise acquires, 90 per cent. or more of the
M&C Shares by nominal value and voting rights attaching to such
shares to which the Proposed Offer relates (which would not include
any M&C Shares held by the CDL Parties), and assuming that all
of the other Conditions of the Proposed Offer have been satisfied
or waived (if capable of being waived), Bidco would intend to
exercise its rights pursuant to the provisions of Chapter 3 of Part
28 of the Companies Act to acquire compulsorily the remaining
M&C Shares on the same terms as the Proposed Offer.
If the Proposed Offer were to become or be declared wholly
unconditional, M&C would make an application for the
cancellation of the listing of M&C Shares on the Official List
of the UKLA and for the cancellation of trading of the M&C
Shares on the London Stock Exchange's Main Market for listed
shares.
It is anticipated that cancellation of the listing of M&C
Shares on the Official List of the UKLA and cancellation of trading
of the M&C Shares on the London Stock Exchange would take
effect no earlier than 20 Business Days after the date on which
Bidco has, by virtue of its shareholdings and acceptances of the
Proposed Offer, acquired or agreed to acquire issued share capital
carrying 75 per cent. of the voting rights of M&C as well as a
majority of voting rights held by the Independent M&C
Shareholders. Bidco would notify M&C Shareholders when the
required percentages have been attained (or the compulsory
acquisition notices served) and confirm that the notice period has
commenced and the anticipated date of cancellation.
It is also intended that, if the Proposed Offer were to become
or be declared wholly unconditional and the M&C Shares were to
be de-listed, M&C would be re-registered as a private
company.
Any such cancellation and re-registration would significantly
reduce the liquidity and marketability of any M&C Shares not
assented to the Proposed Offer and their value may be affected as a
consequence. Any remaining M&C Shareholders would become
minority shareholders in a privately controlled limited company and
may be unable to sell their M&C Shares and there can be no
certainty that any dividends or other distributions would be made
by M&C or that the M&C Shareholders would again be offered
as much for the M&C Shares held by them as under the Proposed
Offer.
15 Dividend
Other than the Proposed Special Dividend, if any dividend or
other distribution is authorised, declared, made or paid in respect
of M&C Shares on or after the date of this announcement, the
Proposed Offer Price would be reduced by the amount of any such
dividend or other distribution.
16 General
The bases and sources of certain financial information contained
in this announcement are set out in Appendix I to this
announcement. Certain terms used in this announcement are defined
in Appendix II to this announcement.
17 Documents available on website
This announcement will be made available on CDL's website at
www.cdl.com.sg/Millennium-Offer and M&C's website at:
https://investors.millenniumhotels.com/regulatory-announcements-and-news/city-developments-ltd-offer-documents
until the end of the Proposed Offer.
Enquiries:
Bidco and City Developments
Limited
Belinda Lee, Head, Investor
Relations & Corporate Communications +65 6428 9315
Deutsche Bank AG
Joint Financial Adviser to
CDL +65 6423 8001
Philip Lee +852 2203 8888
Rohit Satsangi +44 (0) 20 7545
Chris Raff 8000
HSBC
Joint Financial Adviser to
CDL
Oliver Smith +44 (0) 20 7991
Barry Rose 8888
Millennium & Copthorne Hotels
plc
Jonathon Grech, Group General
Counsel and Company Secretary
Peter Krijgsman, Financial
Communications (Media) + 44 (0) 20
LEI Number: 2138003EQ1O4LZ1JNH19 7872 2444
Credit Suisse International
Financial Adviser and Corporate
Broker to M&C
John Hannaford +44 (0) 20 7888
Stuart Upcraft 8888
Media Enquiries:
For CDL - Tulchan Communications
LLP
Peter Hewer +44 (0) 20 7353
Will Smith 4200
For M&C - Instinctif Partners
Limited
Matthew Smallwood +44 (0) 20 7457
Mark Reed 2020
Linklaters LLP is retained as legal adviser to CDL. Herbert
Smith Freehills LLP is retained as legal adviser to M&C.
Important Notices
Deutsche Bank AG is subject to supervision by the European
Central Bank and by BaFin, Germany's Federal Financial Supervisory
Authority, and is subject to limited regulation in the United
Kingdom by the Prudential Regulation Authority and Financial
Conduct Authority and in Singapore by the Monetary Authority of
Singapore. Details about the extent of Deutsche Bank AG's
authorisation and regulation by the Prudential Regulation
Authority, the Financial Conduct Authority and the Monetary
Authority of Singapore are available on request. Deutsche Bank AG,
acting through its Singapore branch, is acting as financial adviser
to CDL and no-one else in connection with the subject matter of
this announcement and would not be responsible to anyone other than
CDL for providing the protections afforded to its clients or for
providing advice in connection with the subject matter of this
announcement.
HSBC Bank plc, which is authorised by the Prudential Regulation
Authority and regulated in the United Kingdom by the Financial
Conduct Authority and the Prudential Regulation Authority, is
acting as financial adviser to CDL and for no-one else in
connection with the subject matter of this announcement and would
not be responsible to anyone other than CDL for providing the
protections afforded to its clients or for providing advice in
connection with the subject matter of this announcement.
Credit Suisse International ("Credit Suisse") is authorised by
the Prudential Regulation Authority and regulated by the Financial
Conduct Authority and the Prudential Regulation Authority. Credit
Suisse is acting exclusively for the Independent Committee and for
no one else in connection with the Proposed Offer, the content of
this announcement and other matters described in this announcement.
Credit Suisse would not regard any other person as its client in
relation to the Proposed Offer, the content of this announcement
and other matters described in this announcement and would not be
responsible to anyone other than the Independent Committee for
providing the protections afforded to its clients, nor for
providing advice to any other person in relation to the Proposed
Offer, the content of this announcement or any other matters
described in this announcement.
Save for the responsibilities and liabilities, if any, of Credit
Suisse under FSMA or the regulatory regime established thereunder,
Credit Suisse does not assume any responsibility whatsoever and
makes no representations or warranties, express or implied, in
relation to the content of this announcement, including its
accuracy, completeness or verification or for any other statement
made or purported to be made by the Independent Committee, or on
the Independent Committee's behalf, or by Credit Suisse, or on its
behalf, and nothing contained in this announcement is, or shall be,
relied on as a promise or representation in this respect, whether
as to the past or the future, in connection with the Independent
Committee or the Proposed Offer. Credit Suisse disclaims to the
fullest extent permitted by law all and any responsibility and
liability whether arising in tort, contract or otherwise which it
might otherwise be found to have in respect of this announcement or
any such statement.
This announcement is for information purposes only. It is not
intended to and does not constitute, or form part of, an offer to
sell or an invitation to purchase any securities or the
solicitation of an offer to buy any securities, pursuant to the
Proposed Offer or otherwise. The Proposed Offer would be made
solely by means of an Offer Document and the Form of Acceptance
accompanying the Proposed Offer Document (or, in the event that the
Proposed Offer would be implemented by way of a scheme of
arrangement, a scheme document) which would contain the full terms
and conditions of the Proposed Offer, including details of how the
Proposed Offer may be accepted.
Bidco reserves the right to elect (with the consent of the
Panel) to implement the acquisition of M&C by way of a
court-approved scheme of arrangement in accordance with Part 26 of
the Companies Act. In such event, the acquisition would be
implemented on substantially the same terms, subject to appropriate
amendments, as those which would apply to the Proposed Offer.
The Proposed Offer would be subject to the applicable
requirements of the Code, the Panel, the London Stock Exchange, the
Financial Conduct Authority and the UKLA.
This announcement does not constitute a prospectus or prospectus
equivalent document.
Overseas Shareholders
The release, publication or distribution of this announcement in
certain jurisdictions may be restricted by law. Persons who are not
resident in the United Kingdom or who are subject to the laws
and/or regulations of any jurisdictions other than the United
Kingdom should inform themselves of, and observe, any applicable
requirements. Any failure to comply with the applicable legal
and/or regulatory requirements may constitute a violation of the
laws of any such jurisdiction. To the fullest extent permitted by
applicable law, the companies and persons involved in the Proposed
Offer disclaim any responsibility or liability for the violation of
such restrictions by any person.
This announcement has been prepared for the purposes of
complying with English law, the Listing Rules, the rules of the
London Stock Exchange and the Code and the information disclosed
may not be the same as that which would have been disclosed if this
announcement had been prepared in accordance with the laws and/or
regulations of jurisdiction outside the United Kingdom.
Unless otherwise determined by Bidco or required by the Code,
and permitted by applicable law and regulation, the Proposed Offer
would not be made, directly or indirectly, in, into or from a
Restricted Jurisdiction where to do so would violate the laws in
that jurisdiction, and the Proposed Offer shall not be capable of
acceptance from or within a Restricted Jurisdiction. Accordingly,
copies of this announcement and all documents relating to the
Proposed Offer are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in,
into or from a Restricted Jurisdiction where to do so would violate
the laws in that jurisdiction, and persons receiving this
announcement and all documents relating to the Proposed Offer
(including agents, custodians, nominees and trustees) must not mail
or otherwise distribute or send them in, into or from such
Restricted Jurisdiction as doing so may invalidate any purported
acceptance of the Proposed Offer. Any person (including, without
limitation, any agent, custodian, nominee and trustee) who would,
or otherwise intends to, or who may have a contractual or legal
obligation to, forward this announcement and/or any document
relating to the Proposed Offer to any jurisdiction outside the UK
should inform themselves of, and observe, any applicable legal or
regulatory requirements of their jurisdiction.
The availability of the Proposed Offer to M&C Shareholders
who are not resident in the United Kingdom may be affected by the
laws of the relevant jurisdictions in which they are resident.
Persons who are not resident in the United Kingdom should inform
themselves of, and observe, any applicable requirements.
If you are a Resident of the United States, please read the
following:
The Proposed Offer would be made for the securities of M&C,
a company incorporated under the laws of England and Wales, and
would be made in the United States in compliance with, and reliance
on, Section 14(e) of the Exchange Act and Regulation 14E
thereunder. The Proposed Offer would be made in the United States
by Bidco and no one else.
The Proposed Offer would be subject to the disclosure and
procedural requirements of the United Kingdom which are different
from those in the United States.
It may be difficult for United States holders of shares in CDL
or M&C to enforce their rights and claims arising out of the
United States federal securities laws, since CDL, Bidco and M&C
are located in countries other than the United States, and some or
all of their officers and directors may be residents of countries
other than the United States. Holders in the United States may not
be able to sue a non-United States company or its officers or
directors in a non-United States court for violations of United
States securities laws. Further, it may be difficult to compel a
non-United States company and its affiliates to subject themselves
to a United States court's judgement.
Forward Looking Statements
This announcement, including any information included or
incorporated by reference in this announcement, contains statements
about Bidco, CDL and M&C that are or may be forward looking
statements. All statements other than statements of historical
facts included in this announcement may be forward looking
statements. Without limitation, any statements preceded or followed
by or that include the words "targets", "plans", "believes",
"expects", "aims", "intends", "will", "may", "anticipates",
"estimates", "projects" or words or terms of similar substance or
the negative thereof, are forward looking statements. Forward
looking statements include statements relating to the following:
(i) future capital expenditures, expenses, revenues, earnings,
synergies, economic performance, indebtedness, financial condition,
dividend policy, losses and future prospects; (ii) business and
management strategies and the expansion and growth of Bidco's or
CDL's or M&C's operations; and (iii) the anticipated effects of
the Proposed Offer on the Wider CDL Group and the business and
operations of M&C.
Such forward looking statements involve risks and uncertainties
that could significantly affect expected results and are based on
certain key assumptions. Many factors could cause actual results to
differ materially from those projected or implied in any forward
looking statements. Much of the risk and uncertainty relates to
factors that are beyond the companies' abilities to control or
estimate precisely, such as future events, future market conditions
and the behaviours of other market participants. Other unknown or
unpredictable factors could affect future operations and/or cause
actual results to differ materially from those in the forward
looking statements. Such forward looking statements should be
construed in the light of such factors, and therefore undue
reliance should not be placed on such statements.
Each forward-looking statement speaks only as at the date of
this announcement. Neither Bidco nor CDL or M&C, nor any of
their respective associates or directors, officers, employees,
managers, agents, representatives, partners, members, consultants
or advisers: (i) provide any representation, warranty, assurance or
guarantee that the occurrence of the events expressed or implied in
any forward looking statements will actually occur; nor (ii) assume
any obligation to, and do not intend to, revise or update these
forward looking statements, except as required pursuant to
applicable law. Bidco and CDL disclaim any obligation to update any
forward looking or other statements contained herein, except as
required by applicable law. All forward looking statements
contained in this announcement are expressly qualified in their
entirety by the cautionary statements contained or referred to in
this section.
No Profit Forecasts or Estimates
No statement in this announcement is intended as a profit
forecast or estimate for any period and no statement in this
announcement should be interpreted to mean that earnings or
earnings per share for Bidco, M&C or CDL, as appropriate, for
the current or future financial years would necessarily match or
exceed the historical published earnings or earnings per share for
Bidco, M&C or CDL, as appropriate.
Disclosure Requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent. or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the Offer
Period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 pm (London time) on the 10(th) Business Day following the
commencement of the Offer Period and, if appropriate, by no later
than 3.30 pm (London time) on the 10(th) Business Day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of
(i) the offeree company, and (ii) any securities exchange offeror,
save to the extent that these details have previously been
disclosed under Rule 8. A Dealing Disclosure by a person to whom
Rule 8.3(b) applies must be made by no later than 3.30 pm (London
time) on the Business Day following the date of the relevant
dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at http://www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the Offer Period commenced and when any offeror was first
identified. If you are in any doubt as to whether you are required
to make an Opening Position Disclosure or a Dealing Disclosure, you
should contact the Panel's Market Surveillance Unit on +44 (0) 20
7638 0129.
Electronic Communications
Please be aware that addresses, electronic addresses and certain
information provided by M&C Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from M&C may be provided to Bidco during the
Offer Period as requested under Section 4 of Appendix 4 of the Code
to comply with Rule 2.11(c) of the Code.
Publication on Website and Availability of Hard Copies
In accordance with Rule 26.1 of the Code, a copy of this
announcement, subject to certain restrictions relating to persons
resident in Restricted Jurisdictions, will be available on the
website of CDL at: www.cdl.com.sg/Millennium-Offer and M&C at:
https://investors.millenniumhotels.com/regulatory-announcements-and-news/city-developments-ltd-offer-documents
promptly and by no later than 12 noon (London time) on the Business
Day following this announcement. For the avoidance of doubt, the
contents of these websites referred to in this announcement are not
incorporated into and do not form part of this announcement.
You may request a hard copy of this announcement by contacting
Equiniti Limited on 0371-384-2343 (if calling within the UK) or +44
(0)121-415-7047 (if calling from outside the UK). Lines are open
Monday to Friday 8.30 a.m. to 5.30 p.m.; excluding UK Bank
Holidays. You may also request that all future documents,
announcements and information to be sent to you in relation to the
Proposed Offer should be in hard copy form.
Rounding
Certain figures included in this announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
APPIX I
SOURCES OF INFORMATION AND BASES OF CALCULATION
The value placed by the Proposed Offer on the existing issued
share capital of M&C is based on 324,751,275 M&C Shares in
issue on 18 October 2017, being the last dealing day prior to the
date of this announcement.
The Closing Prices referenced in this announcement are taken
from the Daily Official List.
Unless otherwise stated, the financial information relating to
M&C is extracted from the audited consolidated financial
statements of M&C for the financial year to 31 December 2016,
prepared in accordance with IFRS as required by EU law (IAS
Regulation EC 1606/2002).
Unless specified otherwise, the SGD:GBP exchange rates used in
this Announcement are those set out in this Appendix I.
The M&C FY2016 Results are reported in pounds sterling (GBP)
and accordingly, the figures herein have been converted, where
necessary, into Singapore dollar (S$) based on the exchange rates
adopted by CDL when consolidating the M&C FY2016 Results in the
CDL Group FY2016 Results, being:
-- the closing exchange rate of S$1.7808:GBP1 as at 31 December
2016 for the translation of the balance sheet items; and
-- the average exchange rate of S$1.8791:GBP1 for FY2016 for the
translation of the profit and loss items.
APPIX II
DEFINITIONS
The following definitions apply throughout this announcement
unless the context requires otherwise.
"ABP" the Annual Bonus Plan
"Bidco" Agapier Investments Limited,
a company incorporated in
the British Virgin Islands
with British Virgin Islands
Company Number 707681 whose
registered office is at Vistra
Corporate Services Centre,
Wickhams Cay II, Road Town,
Tortola, VG1110, British Virgin
Islands
"Business Day" a day (other than Saturdays,
Sundays and public holidays
in the UK) on which banks
are open for business in the
City of London
"CDL" City Developments Limited,
a company incorporated in
Singapore with registration
number 196300316Z whose registered
office is at 36 Robinson Road,
#04-01 City House, Singapore
068877
"CDL Group" CDL and its subsidiaries
"CDL Parties" Bidco, CDL and those persons
acting in concert (within
the meaning of the term given
in the Code) with them
"Code" the City Code on Takeovers
and Mergers
"Closing Price" the closing middle market
price of a M&C Share on a
particular trading day as
derived from the Daily Official
List
"Companies Act" the Companies Act 2006, as
amended
"Credit Suisse" Credit Suisse International
"Daily Official the Daily Official List published
List" by the London Stock Exchange
"Dealing Disclosure" has the same meaning as in
Rule 8 of the Code
"ESP" the 2016 Executive Share Plan
"Financial Conduct the Financial Conduct Authority
Authority" acting in its capacity as
the competent authority for
the purposes of Part VI of
the UK Financial Services
and Markets Act 2000
"Form of Acceptance" the form of acceptance and
authority which would accompany
the Offer Document for use
by M&C Shareholders with shares
in certificated form in connection
with the Proposed Offer
"FSMA" Financial Services and Markets
Act 2000
"HSBC" HSBC Bank plc
"Independent Committee" the independent committee
of the M&C Independent Directors
"Independent M&C M&C Shareholders other than
Shareholders" the CDL Parties
"Last Practicable 18 October 2017, being the
Date" last practicable date prior
to the date of this announcement
"Listing Rules" the rules and regulations
made by the Financial Conduct
Authority in its capacity
as the UK Listing Authority
under the Financial Services
and Markets Act 2000, and
contained in the UKLA's publication
of the same name
"London Stock Exchange" London Stock Exchange plc
"LTIP" the 2016 Long Term Incentive
Plan and the 2006 Long Term
Incentive Plan
"M&C" Millennium & Copthorne Hotels
plc, a company incorporated
in England and Wales with
registration number 03004377
whose registered office is
at Victoria House, Victoria
Road, Horley, Surrey, RH6
7AF
"M&C FY2016 Results" the audited consolidated financial
statements of the M&C Group
for the year ended 31 December
2016
"M&C Group" M&C and its subsidiary undertakings
and, where the context permits,
each of them
"M&C Independent the independent non-executive
Directors" directors of M&C which excludes
the appointees of CDL to the
M&C Board (such appointees
being Kwek Leng Beng, Kwek
Leng Peck and Kwek Eik Sheng)
"M&C Shareholders" the holders of M&C Shares
"M&C Share Schemes" the LTIP, the ABP, the ESP,
and the Sharesave Plans
"M&C Shares" the existing unconditionally
allotted or issued and fully
paid ordinary shares of 30
pence each in the capital
of M&C and any further such
ordinary shares which are
unconditionally allotted or
issued while the Proposed
Offer remains open for acceptance
or before such earlier date
as Bidco (subject to the Code)
may determine, not, unless
the Panel so permits, being
earlier than the date on which
the Proposed Offer being or
becoming declared unconditional
as to acceptances or, if later,
the first closing date of
the Proposed Offer
"New Zealand Takeovers the Takeovers Code of New
Code" Zealand
"Offer Document" any document despatched to
M&C Shareholders containing
the full terms and conditions
of the Proposed Offer
"Offer Period" the Offer Period (as defined
by the Code) relating to M&C,
which commenced on 9 October
2017
"OIO" means New Zealand Overseas
Investment Office
"Opening Position has the same meaning as in
Disclosure" Rule 8 of the Code
"Panel" the Panel on Takeovers and
Mergers
"Proposed Offer" the possible recommended cash
offer, made by Bidco, to acquire
the entire issued and to be
issued ordinary M&C Shares
on the terms and subject to
the conditions which would
be set out in the Offer Document
and (in respect of M&C Shares
in certificated form) the
Form of Acceptance and including,
where the context permits,
any subsequent revision, variation,
extension or renewal of such
offer
"Proposed Offer 552.5 pence in cash for each
Consideration" M&C Share held
"Proposed Offer 545 pence per M&C Share
Price"
"Proposed Special the special dividend of 7.5
Dividend" pence per M&C Share to be
paid conditional upon the
Proposed Offer being declared
wholly unconditional
"Prudential Regulation the Prudential Regulation
Authority" Authority in the UK
"Restricted Jurisdiction" any jurisdiction local laws
or regulations may result
in significant risk of civil,
regulatory or criminal exposure
if information concerning
the Proposed Offer would be
sent or made available to
M&C Shareholders in that jurisdiction
"Scheme" a scheme of arrangement (as
that term is defined in the
Companies Act) under Part
26 of the Companies Act between
Bidco and M&C Shareholders
(should Bidco elect to acquire
M&C by way of scheme of arrangement)
"Sharesave Plans" the 2016 Sharesave Plan and
the 2006 Sharesave Plan
"SGX" the Singapore Exchange
"Significant Interest" in relation to an undertaking,
a direct or indirect interest
of 20 per cent. or more of
the total voting rights conferred
by the equity share capital
(as defined in section 548
of the Companies Act) of such
undertaking
"UKLA" the UK Listing Authority,
being the Financial Conduct
Authority Limited acting in
its capacity as the competent
authority for the purposes
of Part VI of the Financial
Services and Markets Act 2000
"United Kingdom" the United Kingdom of Great
or "UK" Britain and Northern Ireland
"United States" the United States of America,
or "US" its territories and possessions,
any state of the United States
of America, and the District
of Columbia
"Wider CDL Group" CDL and associated undertakings
and any other body corporate,
partnership, joint venture
or person in which CDL and
all such undertakings (aggregating
their interests) have a Significant
Interest
For the purposes of this announcement, "subsidiary", "subsidiary
undertaking", "undertaking" and "associated undertaking" have the
respective meanings given thereto by the Companies Act.
All references to "pounds", "pounds Sterling", "Sterling",
"GBP", "pence", "penny" and "p" are to the lawful currency of the
United Kingdom.
All references to "S$" and "Singapore Dollars" are to the lawful
currency of the Republic of Singapore.
All the times referred to in this announcement are London times
unless otherwise stated.
References to the singular include the plural and vice
versa.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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