On Monday, MRE announced the launch of a public offering of nearly 28m American depositary shares, equal to 165m ordinary MRE shares, following MRE’s repurchase of Crown’s remaining stake in the joint venture, which operates casinos in Macau and Manila.
MRE said it expects this transaction to take be complete by May 15, as of which time “Crown Resorts will no longer hold any shares in Melco Resorts.” The transaction won’t dilute MRE’s shareholding, nor will it affect the size of stake held by MRE’s controlling shareholder Melco International Development Ltd, which will remain at 51.2%.
One year ago this month, Crown began reducing its 34.3% stake in MRE’s predecessor, Melco Crown Entertainment, as part of a sweeping refocus of Crown’s business on its domestic properties. Crown initially reduced its MCE stake to 27.4%, then further reduced its holdings to 11.2%, after which MCE announced its rebranding as MRE to reflect Crown’s diminished role.
In addition to eliminating Crown’s involvement in MRE’s existing operations, Monday’s announcement indicated that Crown would have no future role in MRE’s pursuit of a Japanese integrated resort casino license. Crown has made no statement on whether it intends to pursue a solo bid in Japan, but this appears unlikely given its stated commitment to its domestic business.
MRE CEO Lawrence Ho said Monday that he’d made the “strategic decision to terminate the joint venture arrangement and allow Melco to pursue Japan alone.” That said, Ho believes the former joint venture was proof of Melco’s “ability to work with partners in both good times and more challenging operating environments,” which made him confident in Melco’s ability to “enter new markets by working in concert with local partners.”
Ho said that he looked back “with great pride” at the joint venture’s achievements over the past decade, and offered “sincere thanks” to Crown boss James Packer “for being a great friend and partner.” Ho said the transaction “brings to the conclusion the world’s most successful global gaming partnership.”
As a result of Monday’s announcement, MRE confirmed that Robert Rankin, Crown’s last non-executive director on MRE’s board, would be surrendering his seat.