International Value Advisers (IVA) and MSD Partners, which own 7 per cent and 1.9 per cent respectively of London-listed M&C, have sent a letter to the hotel company's independent directors to criticise them for supporting the 552.5 pence per share takeover proposal from Singapore's CDL, which is part of billionaire Kwek Leng Beng's Hong Leong Group.
They join Aberdeen Standard Investments and Fidelity International, two other minority shareholders reportedly unhappy with the terms of the deal.
CDL, which already owns 65.2 per cent of the hotelier, and the independent directors announced the possible deal on Oct. 9, when the directors said they unanimously intended to recommend the bid.
"If the CDL proposal is implemented, M&C shareholders would, under your stewardship and the advice of Credit Suisse, be asked to approve massive value destruction of a company with a premium London Stock Exchange listing," said the Oct. 17 letter signed by Charles de Vaulx of IVA and Jonathan Esfandi of MSD and reviewed by Reuters. "This is not acceptable."
Swiss bank Credit Suisse is the corporate broker and adviser to M&C and advised the independent directors.
M&C has 130 hotels across the world including in London and New York. CDL is aiming to buy the 34.8 per cent of the hotelier it does not own for 624.3 million pounds, valuing the company as a whole at about 1.8 billion pounds.
The CDL proposal implies a 32.5 per cent discount to M&C's 820 pence per share balance sheet net asset value at the end of June, according to the letter.
"Furthermore, we believe the current value of the assets, in existing use, is significantly higher than book value, as the figure used for the vast majority of the hotels is at 2003 valuations," the letter said.