By SIMON HENDERY
Listed hotel operator CDL Hotels has moved to tidy up its convoluted company structure through a $21.3 million full takeover offer for its property development subsidiary, Kingsgate International.
Auckland-based CDL is joining Kingsgate's other significant shareholder, private Singapore investment firm Tai Tak Securities, in a takeover bid.
If the bid is successful, Kingsgate would be delisted from the NZX.
Under the proposal, KIN Holdings, a company owned jointly by CDL and Tai Tak, is offering 32c a share for the 67.7 million shares in Kingsgate - 17.2 per cent of the company - which the two companies do not already own.
CDL has a 61.3 per cent stake in KIN Holdings, meaning the bid, if successful, will cost it $13.3 million, with Tai Tak stumping up the other $8.4 million.
CDL and Tai Tak's present 82.8 per cent combined stake in Kingsgate has attracted the attention of the stock exchange, which has told Kingsgate it does not meet the Listing Rules "spread" requirement to have an appropriately diverse shareholder base.
Other than their joint interest in Kingsgate, CDL and Tai Tak have no relationship.
Kingsgate's interests in Sydney include the Kingsgate Shopping Centre, the former Millennium Hotel in Kings Cross which has been converted into an apartment block called Zenith Residential, and a shopping centre, apartment development and marina at Birkenhead Point.
KIN Holdings said yesterday the takeover offer was being made with a view to privatising Kingsgate while providing the company's minority shareholders with an "appropriate exit mechanism".
The 32c offer price is 3c above Kingsgate's closing price on Monday before the deal was announced.
KIN Holdings said the offer price was 23 per cent above the share's weighted average closing price over the past 12 months. The offer depends on Overseas Investment Commission approval and on the NZSX-50 index not falling any more than 10 per cent during the period of the offer.
ANZ Investment Bank and Bell Gully are advising KIN Holdings on the offer.
CDL seeks full control of property firm
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