A group of shareholders in Millennium & Copthorne Hotels PLC (MLC.LN) said on Thursday that they have written to the company's board of directors to say that they won't tender their shares to City Developments Ltd. (C09.SG), blocking it from reaching the acceptance threshold of its takeover offer.
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The shareholders--comprising International Value Advisers, LLC; MSD Partners, L.P. and its affiliates, and Classic Fund Management AG--said they represent an aggregate of 37% of the shares subject to the offer by City Developments, which they said was highly opportunistic and significantly undervalued M&C.
The independent committee of the board of Millennium and Copthorne said later on Thursday that it had noted the opinions expressed in the letter and that it would respond accordingly in due course.
City Developments, a Singapore-listed company that currently owns 65.2% of M&C, made an updated offer to buy the rest of the hotel company on Dec. 8, valuing it at 2.01 billion pounds ($2.68 billion).
Although M&C's board recommended that the offer be accepted, the group of shareholders said it fundamentally undervalued the company, adding that they hoped to see other shareholders also refuse to tender their shares once the offer is formally made.
The board's handling of the takeover offer raised issues over its representation of independent shareholders, as well as a number of corporate governance issues, the group of shareholders also said.
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The shareholders said it was "nonsensical and highly troubling" that the independent committee of the board has continued to argue that net-asset value has limited relevance in valuing M&C, and criticized the board's approach to shareholder concerns about the low-ball offer.
To overcome these issues, the group of shareholders requested that more independent non-executive directors be appointed to the board. They also asked that the company begin publishing the assessed market value of its assets on an annual basis, among other measures.
Shares in M&C at 1700 GMT trade down 1.3%, or 7.5 pence, at 579.5 pence.
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(END) Dow Jones Newswires
December 14, 2017 12:18 ET (17:18 GMT)