This is the second time the casino and hospitality giant puts Philippines delisting plans on ice
Gaming and hospitality company Melco Resorts & Entertainment today announced that it would postpone a tender offer for its Philippine subsidiary for a second time, Reuters reports. The company also withdrew its application to delist the unit from the Philippine Stock Exchange amid resistance from minority shareholders over the proposed price.
Melco announced its plans to delist last month, citing its failure to raise funds for planned expansion of its City of Dreams Manila integrated resort as the reason for its decision. A tender offer was first scheduled for October 1, with Melco explaining that its purpose was to increase its majority shareholding in its Philippine unit rather than delist. The tender offer was then postponed for Monday, October 22. A new date for the offer is yet to be announced by the gaming company, which is being run by Macau billionaire Lawrence Ho.
Melco currently operates one of three integrated resorts in the Philippine capital. According to filings with the Philippine Stock Exchange, the company planned to buy back shares in its Philippine unit at PHP7.25 per share and to delist the business in a transaction valued at around PHP11.38 billion (approx. $211.5 million).
However, minority shareholders argued that the price announced was “unfair” and “undervalued” the gaming and hospitality company. Melco sold shares in its local unit at a price of PHP14 five years ago when it floated on the Philippine Stock Exchange.
Roel Refran, Chief Operating Officer of the bourse, told Reuters that they have indeed received letters from concerned shareholders and have advised Melco to address the issues before moving forward with its plans. The company needs 95% of the unit’s issued shares in order to be able to proceed with the delisting.
In previous comments on its plans, Evan Winkler, President and Managing Director of Melco International Development, has said that the purpose of the planned delisting was for the company to simplify its corporate structure.
However, Melco recently debuted its Macau subsidiary Studio City International Holdings Ltd. on the New York Stock Exchange, a move that Reuters analysts note has only “added to the complexity of the company’s corporate structure.”
Studio City’s New York Debut Takeaways
Studio City International Holdings, a company that spun out of Melco Resorts & International, currently operates the Studio City integrated resort in Macau. The property features a casino with 970 slot machines and 250 gaming tables as well as VIP gambling facilities, hotels, and dining and entertainment facilities. Its two hotel towers – The Star Tower and The Celebrity Tower – are connected by the world’s first figure-8 ferris wheel.
Studio City debuted Thursday on the New York Stock Exchange, pricing its initial public offering at $12.50 per American depositary share. The company sold 28.75 million ADS and raised $359.4 million. Shares closed at $15.50 per share or up 24% on Studio City’s first trading day.
The amount raised will help Studio City fund construction on vacant land surrounding its integrated resort. The company needs to make sure that it completes development work on that land before 2021 or other wise face penalties from the government of Macau.
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The post Melco Ices Philippines Delisting Process amid Shareholder Unrest appeared first on Casino News Daily.
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