MCK - Millennium & Copthorne Hotels NZ Limited

Started by BlackPeter, Jun 29, 2022, 11:52 AM

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entrep

Quote from: Crackity on Mar 18, 2024, 10:37 PMYes

Does that concern you at all? Have followed this share on and off for years but the ownership always puts me off

BlackPeter

Quote from: entrep on Mar 18, 2024, 10:05 PMVery interesting thread and company structure with the Singapore majority owners. The price has been going one way though despite all the optimism?

It all depends on your time horizon.

Clearly - the share price is correlated both with the real estate market as well as with the state of tourism. Both are still down, so - no surprises here. Some might see this as opportunity to buy and others as opportunity to beat up the stock - so, clearly a win-win.

Look at a 10 year window, and you will see some ups as well as some downs in the share price.

Buy low and sell high, and you will have a reasonable return, sell low and buy high and you won't.

I do see them as one "stabiliser" in a diversified portfolio, not as the next big thing (which may or may not eventuate). Which includes as well selling some of them when the SP is high (which did happen in the past) and buying some more when the SP is low (like now).

But yes, the ownership structure is a worry, but then - which security hasn't owners to worry about? While I think that they are prudent and honorable business people, they clearly have different objectives with this investment to retail shareholders - like using MCK as one of the instruments to under value their assets.

I think there is a place for stocks like that on the exchange - despite realizing that their board and majority owners might have a different agenda to me. But hey, I live as well in NZ despite realising that our government (no matter whether we talk about this or the one before) have a different agenda than I have. Just one of the compromises you have to make.

Its all about using them for what they are good and developing strategies to avoid or mitigate the pitfalls. MCK clearly is one of the stocks I would only use as stabilizing long term investment in a highly diversified portfolio - without loosing the sight for a reasonable sell price.

Crackity

Quote from: Crackity on Jun 02, 2023, 11:55 AMSecond article in two days on MCK at NBR and this one is a longer one


Heading - A hotel company with an attitude
problem


ANALYSIS: Millennium & Copthorne's disdain for minority shareholders is written all over its accounts.


Excerpt 1. -


The MSocial would also be far from the only valuable property on the hotel company's books. For example, according to property records its Copthorne Hotel at 31 Frankton Rd in Queenstown has a land value on its own of $46.75m, slightly

 more than the book value of all the land on MCK's balance sheet. Including the buildings the property has a rating valuation of $116m.
That's just one of 14 hotels in the MCK owned portfolio.


Excerpt 2 -

Seen in that light there is surely at least potential for value realisation at MCK. The hard part will be getting the board to admit it when a lowball takeover offer is so much easier.
Investors who want to check it out will have to read the notes closely.


And here is the lowball offer......

Mos

#33
Time for the Independent Directors to prove that they are firstly independent and secondly competent. Derisory take over "offer" price. 

Crackity

Interesting Tim Hunter NBR article today- here some snippets for pondering further


Snippet 1-
In 2021 the New Zealand company changed its accounting policies on the carrying value of its land and buildings to align with its UK parent. Where the assets had previously been carried at fair value, they were now carried at cost.

According to its annual report that year, "the costs of running the hotels are more relevant to users than the fair value of the buildings as there is no intention to sell".

At a stroke, the company's assets were worth, on paper, hundreds of millions less than before.

Based on the December 2023 balance date, the difference was $377m – a book value of $3.46 a share versus a fair value of $5.84, according to a helpful table in the annual report.



Snippet 2-
The way to think about Millennium & Copthorne would therefore not be as a hotel company. It's more like a real estate company that runs hotels to generate cashflow in between long-term property transactions, just as residential property investors get rent from tenants but are really in it for the capital gain.

Seen in that light, the value of its hotels as real estate is highly relevant and the board has been bullshitting its minority shareholders.



You want more then NBR would love you to subscribe......

Crackity

For the poet ( give me an email if you still have mine and we can discuss further ) I've got a few of these MCK ords.

Notes about the challenge rules -

1.  Need 10% of the outstanding shares of the relevant class to object to the consideration to trigger the review. The relevant class is all the holders that have not accepted the offer. Say holders of 5 million shares do not accept the offer then there must be written objections from 500k. If the hurdle of 10% is not met the 'final' price is the final price paid.

2. Written objections must be received within 10 business days.

3. The independent expert is appointed by the Takeovers Panel not MCK or their independent directors.

4. The valuation basis is assuming the whole company is for sale ( so will negate the fact a majority shareholder wants to screw over the minorities )

5 - Lots of info on the Takeover Panel website including prior case decisions.

Poet

Quote from: Crackity on Jan 30, 2025, 08:53 PMFor the poet ( give me an email if you still have mine and we can discuss further ) I've got a few of these MCK ords.

Notes about the challenge rules -

1.  Need 10% of the outstanding shares of the relevant class to object to the consideration to trigger the review. The relevant class is all the holders that have not accepted the offer. Say holders of 5 million shares do not accept the offer then there must be written objections from 500k. If the hurdle of 10% is not met the 'final' price is the final price paid.

2. Written objections must be received within 10 business days.

3. The independent expert is appointed by the Takeovers Panel not MCK or their independent directors.

4. The valuation basis is assuming the whole company is for sale ( so will negate the fact a majority shareholder wants to screw over the minorities )

5 - Lots of info on the Takeover Panel website including prior case decisions.

Thanks for that BP.

I think that it is all a bit of a moot point though. If the bidder gets to 90% then they will already have had acceptances for more than 50% of the shares subject to the takeover offer and hence no rights of appeal available to holdouts. If they don't get to the 90% acceptance then they can't buy any extra shares and the takeover fails entirely.

Let's hope that they raise the offer price considerably in order to get to that 90%

Mos

Quote from: Mos on Jan 20, 2025, 01:56 PMTime for the Independent Directors to prove that they are firstly independent and secondly competent. Derisory take over "offer" price. 

Independent Directors have stepped up and shown Independence, Competence and Backbone in the face of the opportunistic low ball offer from the majority shareholder. Great to see.

https://www.nzx.com/announcements/446455

MCK Independent Directors say takeover offer is too low

10/02/2025, 15:10 NZDT, MKTUPDTE
MCK Independent Directors say takeover offer is "too low and inadequate" 10 February 2025: Millennium & Copthorne Hotels New Zealand Limited (NZX: MCK) advises that it has received notice that CDL Hotels Holdings New Zealand Limited (CDLHH NZ) has sent its takeover offer (Offer) to holders of MCK's ordinary shares (Shares). The Offer price is $2.25 per share for all of the Shares in MCK not already held by CDLHH NZ and follows the Takeover Notice that MCK received from CDLHH NZ on 20 January 2025. CDLHH NZ currently holds 75.8% of MCK's Shares. --Too low and inadequate **The view of the MCK Independent Directors is that the CDLHH NZ offer is too low and is inadequate. The Independent Directors believe that the Offer does not sufficiently reflect the value of MCK's hotel and property net assets, and the benefits that MCK can expect as the hotel and property markets recover**. Chair of the Independent Directors Committee, Leslie Preston, said: "Our view is that the Offer is too low and does not provide adequate value to minority shareholders. We will provide shareholders with a Target Company Statement within the next two weeks that will include more detail, but we are advising shareholders to take no action at this time". Northington Partners Limited has been appointed by MCK to act as the Independent Adviser to provide an independent assessment for shareholders of the merits of the CDLHH NZ offer.

Basil

#38
Woefully inadequate. Interesting write-up by Adrian Capital I got in my inbox this morning. Reckons the real fair value is north of $9 with a whole stack of calculations supporting the view.
I bought a cheap ticket to this circus just for the corporate entertainment value because Crackity tipped it to me and Arianne Capital's write-up made sense to me.

I expect a slightly higher but still egregiously low takeover offer will be forthcoming in due course. I expect this fiasco will play out over a number of months so there's a fair bit of corporate entertainment to come.

Crackity

Quote from: Basil on Feb 10, 2025, 04:26 PMWoefully inadequate. Interesting write-up by Adrian Capital I got in my inbox this morning. Reckons the real fair value is north of $9 with a whole stack of calculations supporting the view.
I bought a cheap ticket to this circus just for the corporate entertainment value because Crackity tipped it to me and Arianne Capital's write-up made sense to me.

I expect a slightly higher but still egregiously low takeover offer will be forthcoming in due course. I expect this fiasco will play out over a number of months so there's a fair bit of corporate entertainment to come.

Should pay the boat diesel bills for a few months at least Bazza - have been buying lots between $2.20 and $2.23 over the last fortnight. It's a no brainer odds on make motza play to me but then again I didn't buy bitcoin ever so what do I know - DYOR peeps 😎




Basil

Yes, looking forward to it eventually going back into the water. I'll forward you a copy of that Adrian Capital report. Makes for very interesting reading.