The Singapore Market This Week: City Developments Limited Makes Final Offer for London-Listed Millennium & Copthorne Hotels

The local stock market, as represented by the Straits Times Index (SGX: ^STI), slipped 0.7% week-on-week to end Friday at 3,424.64 points.

Out of the 30 index constituents, 18 were in the red; nine were in the green while the rest were flat.

Property giant, CapitaLand Limited (SGX: C31), was one of the companies in the negative territory. It last changed hands at S$3.46, down 3.1% for the week.

On Thursday, it sealed a S$10 million innovation partnership with the Singapore Economic Development Board (EDB). CapitaLand Elevate, as the programme will be called, will focus on training the property firm’s staff in areas such as data analytics, digital marketing and digital product management. Furthermore, it will explore new technologies that will allow CapitaLand to create people-centric products, services and experiences.

CapitaLand’s corporate venture arm, C31 Ventures (C31V), has also invested S$10 million in start-ups. Its portfolio companies include omni-channel retail enabler Ace Turtle, customer insights platform Mobikon, homegrown co-working firm The Great Room, and online table reservation outfit Chope. Since C31V was set up in July last year, 18 proptech initiatives have been piloted at CapitaLand properties

On top of that, C31V has been selected as one of SGInnovate’s co-investment partners under the Startup SG Equity scheme, which aims to encourage private-sector investments in Singapore-based technology start-ups.

Falling more than CapitaLand was ComfortDelGro Corporation Ltd (SGX: C52), as it plunged 6.4% to S$1.91, to become the biggest loser of the index.

Yesterday, the much-awaited news about its tie-up with Uber was announced. The land transport giant will form a joint venture with Uber’s wholly-owned Singapore car rental subsidiary, Lion City Holdings Pte Ltd, in a 51:49 deal.

Valued at around $642 million, with a cash consideration of $295 million, it ranks as the land transport firm’s single largest deal so far. The deal would be paid for by internal funds. As of 30 September 2017, ComfortDelGro had S$538.1 million in short-term deposits and bank balances, and S$350.1 million in total debt.

The chief executive of ComfortDelGro, Yang Ban Seng, commented:

“By working together, we will be able to benefit from each other’s strengths. Uber will benefit from our fleet maintenance and management capabilities while we will benefit from Uber’s world class technology. At the same time, consumers will have even more choice with either taxis or private hire vehicles, shorter waiting times and greater reliability. It’s a win-win situation.”

Meanwhile, City Developments Limited (SGX: C09), or CDL, emerged as the biggest winner of the index, adding 1.5% to S$12.31.

Earlier today, the international property and hotel conglomerate announced that it has put forth a final offer to acquire the remaining shares of its London-listed subsidiary, Millennium & Copthorne Hotels (M&C), that is not owned by CDL. As of 7 December 2017, CDL owns around 65.2% of M&C. The offer is a revised one from the possible offer announced earlier in October this year.

Shareholders of M&C are set to receive an increased cash amount of 600 pence (previously 545 pence) per M&C share and an improved special dividend of 20 pence (previously 7.5 pence) per M&C share.

The final offer values M&C at around £2.01 billion and provides M&C shareholders to realise their investments in cash at a valuation not seen since 2007. After the offer becomes fully unconditional, M&C will apply for delisting from the Official List of the UK Listing Authority.

CDL said that it “intends to maintain M&C’s current business model, in particular to run the business as an owner and operator of its hotel portfolio and also confirms it has no intention to sell or repurpose any of M&C’s hotels in London or in New York”.

The STI ETF (SGX: ES3), an exchange-traded fund which can be taken as a proxy for the Straits Times Index, is now valued at a trailing price-to-earnings ratio of 11.1 and has a dividend yield of 2.9%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P owns units of STI ETF.