MCK - Millennium & Copthorne Hotels.

[traineeinvestor]

There was an item on RNZ business a few days ago.It indicated that already one major hotel investment group was interested in potential acquisitions in NZ. I guess a counter cyclical investor prepared for several years of scant returns . McK a potential acquisition target as the only NZX listed hotel chain company??'
What are others opinions?

Any offer for MCK would either have to be made or supported by the existing controlling shareholder. As a result, any assessment of likelihood of that happening would have to look at their own financial condition - do they have enough cash to make an offer or, alternatively, do they need cash enough to be open to an offer? There are (obviously) other factors to consider but that would be one thing I'd look at.

Disclosure: hold CDL

[BlackPeter]

There was an item on RNZ business a few days ago.It indicated that already one major hotel investment group was interested in potential acquisitions in NZ. I guess a counter cyclical investor prepared for several years of scant returns . McK a potential acquisition target as the only NZX listed hotel chain company??'
What are others opinions?

Given that MCK (NZ) is majority owned by MCK (UK) which is majority owned by CDL (Singapore) which is majority controlled by the Kwek family - and given that I have not heard (and think it highly unlikely) that they did run out of money, would I say that the chances for a takeover offer by anybody else but by said billionaires family is remote and would not succeed.

It might be however well possible that they themselves (or one of their financial arms) try to buy the minority shareholders out ... given that the market cap is currently significantly below the book value.

On the other hand ... a listed MCK is an amazing instrument for them to hide wealth as long as it trades below 40% of book value (from memory). Why would they want to give that up?

[macduffy]

I agree, BP. Acquisitions don't have to be of listed hotel companies. There's plenty of other targets out there, bound to be some who would listen to a reasonable offer.

[BlackPeter]

Hey, there are such things as positive surprises: Just when I started to get used to a no dividend policy from nearly anybody I find not one but two nice dividend payments from both CDL and MCK freshly transferred into in my bank account.

Great stuff !

CDI paid a 3.5 cents (fully imputed) dividend per share. Not bad for a share one can currently buy for 76 cents.

MCK paid a 7.5 cents (fully imputed) dividend per share.

While I acknowledge that CDI's payment might be next year less (and MCK's probably nil) - still great stuff considering the tough times ..

[greater fool]

taken out the trash ..........................................

[percy]

I can only say good luck to Boon Pua,.
I would be beside myself if I was in his position.

[clearasmud]

Greater fool 8.23 million shares

[Southern Lad]

Value of shares issued under DRP was $1,279,884 out of a total dividend payment of $9,758,195 giving a participation rate of about 13%. Therefore pretty evident MCK opted to receive their cash dividend of $6,465,000. No doubt MCK have used to help fund their own dividend payment of $11,866,000 paid on the same date (15 May), about 75% of which was headed offshore to HQ.

[greater fool]

....................snip... about 75% of which was headed offshore to HQ.

More. ( if it did go offshore; CDLHHNZL is NZ company ) You've omitted the preference shares, of which they hold 85%.

[traineeinvestor]

Happy holder of MCK. Impressive they still expect to be profitable overall in 2020, with losses from hotels and residential development remaining a positive earnings generator. The meltdown has been a great opportunity to increase holding at 60% discount to NTA. Very strong balance sheet of both MCK and CDI positions them well to prosper long term and potentially take advantage of short term opportunities.

Given that (i) the residential development is all in CDI and only appears in MCK's through consolidation (ii) CDI has cash and no debt whereas MCK has net debt and (iii) it's not clear to me how much cash MCK is burning through on its hotels at the moment and (iv) nobody knows how long it will be before international tourists return in meaningful numbers, I very much prefer CDI to MCK at the moment. Also, the NTA numbers are as at last balance sheet date - they're not current and I'd be astonished if there isn't some downwards adjustments needed to reflect current realities.

Side question: does anyone know where I can find the terms and conditions of the MCK preference shares?

Disclosure: hold CDI not MCK