Singapore Billionaire Kwek Family’s City Developments Fails To Buy Out M&C New Zealand

City Developments—controlled by billionaire Kwek Leng Beng and his family—failed in its NZ$71 million ($42 million) bid to buy out Millennium & Copthorne Hotels New Zealand’s minority shareholders.

The Singapore-listed property developer held almost 84% of M&C New Zealand at the close of the offer on Thursday, missing the 90% threshold it needed to delist the hotel company, M&C New Zealand said in a regulatory filing.

City Developments had originally offered in January to buy the remaining 24% of the hotel operator for NZ$2.25 a piece but the offer was raised to NZ$2.80 last month as independent directors deemed the first offer as too low.

Despite the improved offer, the independent directors urged minority shareholders to reject the offer, which is still below the fair value of at least NZ$4.40 apiece that was assessed by an independent adviser.

“The offer undervalues the benefits which can be expected as the tourism and property markets recover,” Leslie Preston, chair of the independent directors committee, has said in a letter to shareholders.

The failure to delist M&C New Zealand is another setback for City Developments, which is still reeling from a family feud that has dragged the company’s shares to near historic lows and raised doubts whether the company can revive profits the were hurt by rising borrowing costs and slowing residential sales.

A dispute between City Developments CEO Sherman Kwek and his father, Kwek Leng Beng (who is City Developments’ executive chairman) became public in late February after Leng Beng sued Sherman for control of the Singapore-listed property developer.

While the case has been withdrawn and both parties agreed to set aside their differences, the feud had cast the limelight on one of Singapore’s wealthiest families with an estimated net worth of $11.5 billion. The rift had also cast a shadow at the company’s shareholders’ meeting last month.