Millennium & Copthorne signs $31M deal for Aust subsidiary   24 Dec 2014

Article - BusinessDesk

Millennium & Copthorne confirms $31 mln deal for Australian subsidiary, gains NZX waiver

By Fiona Rotherham

Dec. 24 (BusinessDesk) - Millennium & Copthorne Hotels New Zealand, one of New Zealand’s largest hotel operators, has entered into a $31 million conditional agreement with the Singaporean private investment group, Tai Tak Group, to buy the remaining 38.7 percent of shares in KIN Holdings it doesn’t already own.

Because the transaction involved a related party and accounted for around 22 per cent of Millennium’s market capitalisation, it required a waiver from NZX Regulation to the exchange’s listing rules that prior approval for the deal should be sought from Millennium shareholders.

KIN Holdings is currently the holding company for MCK’s Australian operations and assets, which include the residential units at the Zenith Residences in Sydney and a sales office. The deal is subject to approval by the Australian Foreign Investment Review Board (FIRB).

NZX Regulation said it granted the waiver for the material transaction on the basis that Millennium directors were not personally interested in the transaction, that Millennium was not influenced by Tai Tak to do the deal, and that the terms and conditions of it are on an arms’ length and commercial basis.

Millennium's acquisition of the minority interest in KIN Holdings ends a long association in Australia with the Tai Tak Group that started in the early 1990s. KIN Holdings and its subsidiaries, which included the formerly listed Kingsgate International Corporation Ltd, owned and developed a number of residential and commercial mixed-used developments and other assets in Sydney.

More recently, Millennium and Tai Tak were involved as foundation shareholders in First Sponsor Group, which listed on the Singapore Exchange earlier this year. First Sponsor is doing commercial property development, including hotels, in China.

Millennium has 24 hotels across New Zealand trading under the Millennium, Copthorne and Kingsgate brands and has a majority stake in NZSX-listed CDL Investments. Last month it gained Overseas Investment Office approval for a $14.25 million deal for the remaining 30 per cent interest in Quantum, its main hotel operating subsidiary, that it didn’t already own.

It reported a half-year profit of $6.22 million for the six months ending June 30 this year, off group revenue of $67.41 million. Its shares last traded at $1.30 per share, up 62 per cent in the past year.

The shares were unchanged at $1.30 and have gained 62 percent this year.

(BusinessDesk)

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