CityDev's privatisation bid for M&C bodes well for both, with or without deal: Phillip Capital

SINGAPORE (Dec 12): Phillip Capital is maintaining its “accumulate” rating on City Developments (CityDev) with a target price of $12.10, after the group announced its final takeover offer for the remaining shares of Millennium & Copthorne (M&C) it doesn’t own.

In a Tuesday report, analyst Dehong Tan notes that the new offer of 620 pence per share is 12% higher than previously, and represents an attractive value for CityDev as it is pegged to 0.75 times book value despite it being at a 39% premium to the pre-offer last close price.

The privatisation of M&C is to be RNAV-accretive to CityDev if the deal goes through, adds the analyst, who calculates that the consolidation will lift CityDev’s RNAV by about 10.6% to $15.75 per share with a corresponding adjusted target price of $13.39.

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