MCK - Millennium & Copthorne Hotels.

[percy]

Great opportunity for MCKers to load up.41,039 shares available between $2.51 and $3.25.Last sale was at $2.51 the 52 week low.
Very little competition with just the one buyer at $2.30 for 2,800.

[WAIKEN]

Dividend increase each year. Gross yield of 4.15 compares well to fixed interest returns
Very low debt
High level of cash on hand each year Dividend covered many times
Large and growing discount to NTA
Kwek family are subject to NZX regulations
They tried to take over Millenium on the LSE and were beaten back but the NTA gap closed
See below This is a no brainer investmentShareholders in Millennium & Copthorne Hotels (M&C) have escalated a row with the company’s directors over a £1.8bn takeover raid from its billionaire chairman. Two of the FTSE 250 hotel giant’s biggest investors have asked M&C’s independent directors not to recommend a possible offer from Kwek Leng Beng, who is also the majority shareholder.
The Singaporean tycoon’s investment vehicle, City Developments Limited, controls 65% of M&C and revealed this month that it had reached an agreement with the company’s board to buy out the other 35% of the shares.
Kwek is set to offer 552.5p a share for the rest of M&C, a 21% premium to its undisturbed share price. M&C’s shares closed at 586.5p on Friday, suggesting that investors expect a better deal.
In…

[beetills]

Buying land up north and building a new hotel.
Should this news be reflected in its sp or are MCK one of those shares that either stands still or slowly goes down.
NTA over $4

[percy]

Looks as though the market got really excited and moved the sp up a cent.
However MCK's chart still looks awful,so take care.

[Beagle]

Oh my goodness, you aren't kidding about the chart. Talk about a steady and sustained downtrend. That's ugly !!
Word on the street in Queenstown in September was there's lots of spare capacity. Tourism numbers just not the same growth anymore, not even close but heaps of new capacity has been built and still is being built. I got a lovely, almost brand new, hotel room in Frankton for under $150 a night. Hmmmm...wonder how much money there is in that and I wonder what the occupancy rate is like in the shoulder season ?

[BlackPeter]

Oh my goodness, you aren't kidding about the chart. Talk about a steady and sustained downtrend. That's ugly !!
Word on the street in Queenstown in September was there's lots of spare capacity. Tourism numbers just not the same growth anymore, not even close but heaps of new capacity has been built and still is being built. I got a lovely, almost brand new, hotel room in Frankton for under $150 a night. Hmmmm...wonder how much money there is in that and I wonder what the occupancy rate is like in the shoulder season ?

As usual - it always depends on the time frame you are looking at. 5 years chart not too ugly, isn't it?

MCK.JPG

Have as well a look at their balance sheet - NTA from memory north of $4 per share - and given that they are the majority owner of CDL development are roughly 3/4 of their current marketcap already paid by the CDI shares they own. The hotels are basically free.

Clear deep value play .. but sure, if you need your money today than you might be (depending on when you bought in) a bit short.

Anyway - happy holder and in the money (wish I could have said the same about my TRA holding).

[Beagle]

For sure mate, it depends upon your timeframe but what's not in dispute at this point is that the shares are in a clear downtrend.

[BlackPeter]

Interesting back of an envelope calculation:

MCK declared in their last FY report (12/18) total assets of $898m and total liabilities of $174m, wich leaves a net equity of $724m;

Part of this net equity are roughly 185m CDL shares, which currently trade at 87 cents - that's roughly $161m

Current marketcap of MCK (@2.45) is $258m

Marketcap minus (current) value of CDL shares is $97m;

However - equity minus value of CDL shares is $563m;

Which means we can buy $563m (including more than $100m of cash and short term bank deposits) of equity for $97m;

Sounds like a deep value play ...

[Vaygor1]

Interesting back of an envelope calculation:

MCK declared in their last FY report (12/18) total assets of $898m and total liabilities of $174m, wich leaves a net equity of $724m;

Part of this net equity are roughly 185m CDL shares, which currently trade at 87 cents - that's roughly $161m

Current marketcap of MCK (@2.45) is $258m

Marketcap minus (current) value of CDL shares is $97m;

However - equity minus value of CDL shares is $563m;

Which means we can buy $563m (including more than $100m of cash and short term bank deposits) of equity for $97m;

Sounds like a deep value play ...

Out of interest, is the equity to which you refer skewed because of the MCKPA preference shares on the NZX? Not sure how its relates to, or impacts, the figures.

[BlackPeter]

Out of interest, is the equity to which you refer skewed because of the MCKPA preference shares on the NZX? Not sure how its relates to, or impacts, the figures.

Not quite sure I understand - how would this work?