Lee family bid to take Mulpha private as hospitality surges

A view of Mulpha’s InterContinental Sydney Hotel.

Malaysia’s Lee family are looking to seize control of their diversified hotel and resort group Mulpha and have quietly lobbed a takeover bid for the global investment and development giant.

The 1980s business tycoon Lee Ming Tee has joined with his scions in a bid to acquire the remaining 49.98 per cent of the Malaysian-listed company which has a market value of about 709.49m Malaysian ringgitt ($235.94m) and controls the InterContinental Sydney Hotel and the InterContinental Hayman Island as well as assets in the NSW Hunter Valley, Perisher Valley and hotels in London.

Mulpha has received notice of an unconditional voluntary takeover offer from UOB Kay Hian Securities (M) Sdn Bhd on behalf of the joint parties, whom are offering RM2.30 a share.

The thinly-traded stock has bounced back from pandemic lows of RM1.21 but has traded poorly over longer periods, despite Australia’s long running property boom.

The players include Lee Seng Huang, Lee Seng Hui and Lee Ming Tee, as well as companies including Magic Unicorn Ltd, Klang Enterprise Sdn Bhd, Sagittarius Management Sdn Bhd, Mountbatten Corp, Nautical Investments Ltd and Mount Glory Investments Ltd.

They plan to buy the remaining 155.52m shares, which equates to a stake of around 49.98 per cent.

The bid comes as the company has come through one of the worst tourism periods in history, including several Queensland cyclones which have substantially damaged its key asset Hayman Island, as well as the coronavirus crisis.

While it has tried and failed to sell its Hayman Island resort, Mulpha has overhauled its portfolio locally under the stewardship of former Ardent Leisure CEO Greg Shaw and invested in lending, technology and education.

It remains to be seen whether the bid will succeed but it could provide a marker for the value of local hospitality and property assets.

Mulpha has tried and failed to sell its Hayman Island Resort.

Mulpha, a significant gaming operator, invests across real estate, hospitality and education sectors and has holdings across Malaysia, Australia, Britain and NZ. It is Malaysia’s largest real estate investor and developer in Australia.

Other local assets include the resort-styled Sanctuary Cove on the Gold Coast and Norwest Business Park in Sydney.

The full refurbishment of InterContinental Sydney has been accomplished, just as cashed-up international travellers begin to come back in higher volume.

It is also developing Norwest Quarter in Sydney which will comprise nine high-rise towers, ranging from eight to 26 storeys, which will house about 864 apartments.

This positive catalyst for the hospitality and tourism economy is expected to see a gradual recovery to pre-pandemic levels and Mulpha reckons its flagship hotel asset in Sydney’s Circular Quay will be well positioned to receive this demand.

Mulpha’s profit rose 15.8 per cent to RM35.77m in the most recent quarter as its hospitality division recovered. The hotel properties delivered stronger trading results from the recovering domestic travels with improved occupancy rates and higher room rates.

The property unit had lower revenue of RM58.35m due to lower settlements in Mulpha Norwest and at Sanctuary Cove, and the company blamed the multiple increased interest rates by the Reserve Bank.

Increased wedding events bookings at their Bimbadgen Palmers Lane events property in the NSW Hunter Valley and the Sanctuary Cove International Boat Show also contributed positively to the hospitality division. The investment unit’s revenue increased by RM6.12m due to higher volume of debt financing deals and new businesses in promotional merchandise and a car wash business.