Millennium & Copthorne Hotels New Zealand wants to raise up to $112 million from shareholders to invest in property development in China.
Some of the funds will also be used to repay debt and to refurbish some of the company hotels.
The planned sale of one new, non-voting preference share for every two shares investors already own is a large chunk of money for a company with a market value of $230.5 million.
The investment in China will be through an associate company called First Sponsor Capital.
British-listed major shareholder Millennium & Copthorne Hotels Plc is committed to taking up its rights in full and said it could apply for more shares if other shareholders did not want them.
Milford Asset Management executive director Brian Gaynor did not rate the offer, saying it was unsatisfactory from a New Zealand minority shareholders' point of view because the preference shares had no voting rights and could only be redeemed in cash if 75 percent of shareholders approved.
"Millennium & Copthorne is irregularly traded on the sharemarket. These are going to be even more irregularly traded, so there's not going to be a lot of liquidity for shareholders to invest in it," Mr Gaynor said.
It was hard to know if there would be much support from New Zealand minority shareholders for the offer but Mr Gaynor did not expect it to be high.