Photo: RNZ / Dan Cook
The takeover battle at Millennium & Copthorne Hotels (MCK) shows no sign of respite, with the company's independent directors telling shareholders to reject an improved offer from its majority owner.
Singapore-based CDL Hotels owned 79 percent of MCK and recently raised its takeover offer to $2.80 a share from the $2.25 offered in February, for the shares it did not already own.
MCK's independent directors said while they welcomed the higher offer, they felt it was "significantly below" an independent valuation of between $4.40 to $5.00 per ordinary share.
"The increased offer is still at a material discount to the market value of MCK's net assets and significantly undervalues the $129.5 million of recent acquisitions made by MCK," MCK's Independent Directors Committee chair Leslie Preston said.
ACC also hit out at the improved offer from CDL last week.
CDL said the offer was unconditional and would not make another offer under the Takeovers Code for at least nine months.
Under the Code, if a person or firm owned 90 percent or more shares in a company, they may compulsorily acquire the remaining shares.
Preston and the independent directors highlighted the potential consequences if CDL did not reach the 90 percent threshold.
"The trading price of MCK ordinary shares on NZX may reduce (potentially materially) below the increased offer price," she said.
"Liquidity for MCK ordinary shares is likely to decrease further - which may also impact the trading price of MCK ordinary shares on NZX."
Preston said, ultimately, the decision was down to each shareholder and said "we acknowledge that this is not an easy decision".
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