CDL Ups Takeover Offer for Millennium & Copthorne, But Critics Say Its Still Not Enough

Highlights:

• Millennium & Copthorne Hotels New Zealand Limited (NZX: MCK) shares surged 27% to $2.75 at the time of writing after CDL Hotels Holdings New Zealand raised its takeover offer to $2.80 per share.
• The revised bid values the company at approximately $237 million, but shareholder advocates say the offer still undervalues MCK’s assets and potential.
• The New Zealand Shareholders’ Association suggests further negotiations may be needed to reach a fair price for minority investors.

Improved Offer Sparks Share Price Surge

Millennium & Copthorne Hotels New Zealand Limited (NZX: MCK) saw its share price soar by 27% to $2.75 after CDL Hotels Holdings New Zealand, a subsidiary of City Developments Limited (SGX: C09), raised its takeover offer to $2.80 per share. At the time of writing, this marks a substantial increase from the previous bid of $2.25 per share made in January, which aimed to acquire the 24.1% stake in MCK that CDL does not already control.

Shareholders Still Not Convinced

Despite the improved terms, the offer continues to fall short of expectations, according to New Zealand Shareholders’ Association (NZSA) chief executive Oliver Mander. He emphasized that the revised offer still undervalues the hotel operator, given its underlying asset base and recovery potential in the post-pandemic tourism environment. The company owns several high-profile hotel properties, making it a valuable asset in a rebounding travel market.

Valuation Dispute Continues

CDL’s latest offer pegs the valuation of MCK at around $237 million. However, industry observers and shareholder advocates argue that the company’s assets are worth significantly more, particularly with tourism steadily gaining ground in New Zealand. Mander noted that while the increased bid reflects progress, it doesn’t yet represent a fair value for minority shareholders.

What’s Next for MCK Investors?

At the time of writing, it remains unclear whether the higher offer will be enough to sway remaining investors. Analysts suggest that further negotiations or another revised bid may be on the horizon, especially if shareholder pressure continues to mount.

The standoff highlights ongoing debates around fair value in takeover bids and the importance of protecting minority shareholder interests.

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