TIDMMLC
RNS Number : 0498C
City Developments Limited
16 January 2018
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 OF THAT
JURISDICTION
16 January 2018
RECOMMED FINAL CASH OFFER
for
Millennium & Copthorne Hotels plc ("Offeree")
by
Agapier Investments Limited ("Offeror")
(a company indirectly and wholly-owned by City Developments
Limited ("CDL"))
NO EXTENSION STATEMENT
1 Introduction
On 8 December 2017, the boards of CDL and the Offeror and the
Offeree Independent Directors, announced a recommended final cash
offer pursuant to which the Offeror would acquire the entire issued
and to be issued ordinary share capital of the Offeree not already
owned by CDL and its subsidiaries (and persons acting in concert
with them), which is final and will not be increased (the "Final
Offer"). The full terms of, and conditions to, the Final Offer and
the procedures for acceptance were set out in the offer document
dated 21 December 2017 (the "Offer Document").
Defined terms used but not defined in this announcement have the
same meanings as set out in the Offer Document.
2 Reasons to accept the Final Offer
Under the terms of the Final Offer, Offeree Shareholders are
entitled to receive a cash amount of 600 pence per Offeree Share
payable by the Offeror together with a special dividend of 20 pence
per Offeree Share payable by the Offeree to all Offeree
Shareholders upon the Final Offer becoming or being declared wholly
unconditional.
The Final Offer (which includes the Special Dividend) represents
a premium of approximately 36.3 per cent. to the Closing Price of
the Offeree Shares of 455 pence per Offeree Share on 6 October 2017
(being the last Business Day before the start of the Offer Period),
which is a very substantial premium given the size of CDL's
existing shareholding in the Offeree. The Final Offer (which
includes the Special Dividend) is also higher than the price at
which Offeree Shares have closed on any day in the 10 years prior
to the announcement of the Possible Offer on 9 October 2017.
Given the CDL Group owns approximately 65.20 per cent. of the
Offeree, CDL believes that there is little possibility of any
third-party offeror emerging and hence the Final Offer is likely to
be the only liquidity event that Offeree Shareholders will have the
opportunity to benefit from in the near to medium term in an
illiquid stock. Moreover, the Final Offer is final, will not be
increased and is an opportunity that is highly unlikely to be
repeated again in the near future.
Given the many challenges the Offeree faces today, CDL believes
that taking the Offeree private is in the best interests of all
Offeree Shareholders. As more fully set out in CDL's announcement
of 19 October 2017 and the Offer Document, CDL believes that:
-- the Offeree faces multiple challenges and a highly competitive landscape; and
-- significant capital investment is needed which could
adversely impact the Offeree's earnings and ability to maintain its
dividend.
CDL notes that some Offeree Shareholders have expressed a view
that the Offeree should be valued by reference to its asset value.
However, CDL continues to believe that such values are unlikely to
be realised either in a listed Offeree with CDL as controlling
shareholder or indeed by CDL following a successful offer.
Furthermore, CDL firmly believes that it is not appropriate to
value the Offeree on the basis of its net asset value given
that:
-- the Offeree is operated and valued as a hotel company;
-- CDL intends to maintain the Offeree's twin strategy as both a
hotel owner and operator and has confirmed that it has no intention
to sell or repurpose any of the Offeree's hotels in London or in
New York for a period of at least three years from the date on
which the Offer Period ends; and
-- irrespective of CDL's strategy, there would likely be
significant impediments to a conversion or repurposing strategy for
the Offeree's hotel assets.
Kwek Leng Beng, Chairman of CDL, has commented
"Since its listing 21 years ago M&C has been, and will
continue to be, an operator of hotels internationally. As its
performance shows, it faces a highly challenging trading
environment in each of its locations with intensifying competition.
The Hotels need substantial capital investment. The Board of CDL
believes that prior to making this investment, with the likely
disruptive impact this will have on trading and impact on the
profitability and balance sheet of M&C, CDL should offer the
minority shareholders a chance to exit from an illiquid investment
at a substantial premium. We believe this Final Offer represents
full value for the M&C shares that the CDL group does not
already own. This Final Offer (including the Special Dividend) is
at an approximately 36.3 per cent. premium to the Closing Price of
M&C Shares of 455 pence the day prior to the start of the offer
period and values M&C at a price higher than any price M&C
shares have closed on in the 10 years prior to the start of the
possible offer. This Offer is highly unlikely to be repeated in the
near future and the Board of CDL would encourage M&C
shareholders to accept it."
3 No extension statement
CDL and the Offeror are conscious that the Final Offer, by its
nature, creates a period of uncertainty for both CDL and the
Offeree which is in neither CDL's nor the Offeree's interests. In
particular, CDL believes that the full Offeree Board should be
provided with an appropriate period to consider the Offeree's
medium-term investment needs and capital distribution policy in
advance of announcing its preliminary results for the year ended 31
December 2017, due to be released in February 2018 with clarity on
the Offeree's ongoing ownership structure and listing status.
The First Closing Date remains 1.00pm (London Time) on 23
January 2018. An announcement regarding the level of acceptances at
this time and confirmation of whether or not the Final Offer will
be extended will be made as soon as possible thereafter as stated
in paragraph 1.1 in Part B of Appendix 1 to the Offer Document.
There can be no assurance, however, that the Offeror shall extend
the Final Offer and, if no such extension is made, the Final Offer
shall lapse on the First Closing Date and no Offeree Shares shall
be purchased pursuant to the Final Offer.
However, CDL has decided that in light of the above, the Final
Offer, which remains subject to the terms and conditions set out in
the Offer Document, will not be extended beyond 1.00pm (London
time) on 26 January 2018 unless the Acceptance Condition has been
satisfied by such time.
Offeree Shareholders who have not yet accepted the Final Offer
and who wish to do so should take action to accept the Final Offer
as soon as possible.
4 Procedure for acceptance of the Final Offer
Offeree Shareholders who have not yet accepted the Final Offer
are urged to do so by the following deadlines:
-- If you hold Offeree Shares in certificated form (that is, not
in CREST), you should complete and return the Form of Acceptance as
soon as possible and in any event so as to be received by the
Receiving Agent, Equiniti Limited, no later than 1.00 p.m. on 23
January 2018.
-- If you hold your Offeree Shares in uncertificated form (that
is, in CREST), you should ensure than an electronic acceptance is
made by you or on your behalf and that settlement is made no later
than 1.00 p.m. on 23 January 2018.
Acceptances received after that time cannot be taken into
account in determining whether the acceptance condition has been
satisfied. It is therefore very important that shareholders who
wish to accept the Final Offer act as soon as possible. Failure to
do so could result in the Final Offer lapsing.
Full details on how to accept the Final Offer are set out in the
Offer Document, a copy of which is available on CDL's and the
Offeree's websites at www.cdl.com.sg/Millennium-Offer and
https://investors.millenniumhotels.com/regulatory-announcements-and-news/city-developments-ltd-offer-documents
respectively.
5 Compulsory acquisition, de-listing and re-registration
If the Offeror receives acceptances under the Final Offer in
respect of, and/or otherwise acquires, 90 per cent. or more of the
Offeree Shares by nominal value and voting rights attaching to such
shares to which the Final Offer relates (the expression "shares to
which the Final Offer relates" shall be construed in accordance
with Chapter 3 of Part 28 of the Companies Act), and assuming that
all the other Conditions of the Final Offer have been satisfied or
waived (if capable of being waived), the Offeror intends to
exercise its rights pursuant to the provisions of Chapter 3 of Part
28 of the Companies Act to compulsorily acquire the remaining
Offeree Shares in respect of which the Final Offer has not been
accepted on the same terms as the Final Offer.
If the Final Offer becomes or is declared unconditional in all
respects, the Offeror intends to procure that the Offeree will make
an application for the cancellation of the listing of the Offeree
Shares on the Official List and for the cancellation of trading of
the Offeree Shares on the London Stock Exchange's market for listed
securities.
It is anticipated that cancellation of the listing of the
Offeree Shares on the Official List of the UKLA and cancellation of
trading of the Offeree Shares on the London Stock Exchange will
take effect no earlier than 20 Business Days after the date on
which the Final Offer becomes or is declared unconditional in all
respects.
Following such de-listing, the Offeror intends to procure that
the Offeree re-registers from a public limited company to a private
limited company.
Such cancellation of the admission to listing of the Offeree
Shares on the Official List and to trading on the London Stock
Exchange will significantly reduce the liquidity and marketability
of any Offeree Shares in respect of which the Final Offer has not
been accepted at that time. Further, following the Final Offer
becoming, or being declared, unconditional in all respects and
until the admission to listing of the Offeree Shares on the
Official List and to trading on the London Stock Exchange is
cancelled and the Offeree is re-registered as a private company,
the Offeree Shares in relation to which the Final Offer has not
been accepted shall only represent at most approximately 17.4 per
cent. in nominal value of the issued ordinary share capital in the
Offeree, with the Offeror holding the balance of such issued
ordinary share capital. As such, once the Final Offer has become,
or is declared, unconditional in all respects, even if the
admission to listing of the Offeree Shares on the Official List and
to trading on the London Stock Exchange is not subsequently
cancelled, the Offeror shall retain control over the management and
governance of the Offeree Group and the holders of other Offeree
Shares shall not (save in certain limited cases) be able to block
ordinary or special resolutions of the Offeree, and their ability
through the exercise of shareholder rights to influence the
day-to-day management or governance of the Offeree Group, to direct
its future strategy or to direct the declaration or payment of
dividends or other distributions shall accordingly be significantly
reduced.
6 Further information
Enquiries:
City Developments Limited
and Agapier Investments Limited
Belinda Lee, Head, Investor
Relations & Corporate Communications +65 6428 9315
Deutsche Bank AG, Singapore
Branch
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
Important Notices
Unless expressly defined in this announcement, terms defined in
the Offer Document have the same meaning when used in this
announcement. All references to time in this announcement are to
London time.
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 the
Final Offer and 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 the Final Offer and 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 the Final Offer and 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 the Final
Offer and this announcement.
This announcement is for information purposes only and does not
constitute an offer to sell or an invitation to purchase any
securities or the solicitation of an offer to buy any securities,
pursuant to the Final Offer or otherwise. The Final Offer has been
made solely by means of an Offer Document and the Form of
Acceptance accompanying the Offer Document, which contain the full
terms and conditions of the Final Offer, including details of how
the Final Offer may be accepted.
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 Final
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 the Offeror or required by the
Code, and permitted by applicable law and regulation, the Final
Offer is not being made, directly or indirectly, in, into or from a
Restricted Jurisdiction where to do so would violate the laws in
that jurisdiction, and the Final Offer is not capable of acceptance
from or within a Restricted Jurisdiction. Accordingly, copies of
this announcement and all documents relating to the Final 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 Final 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 Final 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 the Offer Document and/or any
other related document 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 Final Offer to Offeree 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 Final Offer is being made for the securities of the Offeree,
a company incorporated under the laws of England and Wales, and is
being 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 Final Offer will
be made in the United States by the Offeror and no one else.
The Final Offer is 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 the Offeree to enforce their rights and claims arising out of
the United States federal securities laws, since CDL, the Offeror
and the Offeree 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 Offeror, CDL and the Offeree 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
Offeror's or CDL's or the Offeree's operations; and (iii) the
anticipated effects of the Final Offer on the Wider CDL Group and
the business and operations of the Offeree.
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 Offeror nor CDL or the Offeree, 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. Offeror 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 Offeror, the Offeree 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 Offeror, the Offeree or CDL, as appropriate.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in
1% 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 on the 10th business day following the commencement of the
offer period and, if appropriate, by no later than 3.30 pm 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% 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 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 Takeover 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 Takeover Panel's Market Surveillance Unit on +44
(0)20 7638 0129.
Publication on website and availability of hard copies
This announcement will be available subject to certain
restrictions relating to persons resident in restricted
jurisdictions on CDL's website at www.cdl.com.sg/Millennium-Offer
by no later than 12 noon on the Business Day following this
announcement. For the avoidance of doubt, the contents of this
website is not incorporated into and does 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 am to 5.30 pm, excluding UK Bank Holidays.
You may also request that all future documents, announcements and
information to be sent to you in relation to the Final Offer should
be in hard copy form.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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