Melco Resorts and Entertainment (Philippines) Corporation, which operates the City of Dreams Manila casino, announced its delisting from the Philippine Stock Exchange (PSE).
In a filing, MCO (Philippines) Investments Limited, the majority shareholder of Melco Philippines, declared it will be conducting a tender offer for 1.5 billion shares, constituting 27.23% of Melco Philippines’ outstanding capital stock, at PHP7.25 ($0.13) per share, for a total of PHP11.2 billion ($207.4 million).
Parent company Melco International Development Limited, in a filing with the Hong Kong Stock Exchange, said that MCO “viewed the listed status as an important tool allowing [Melco Philippines] to raise funds in the Philippines public market, in order to provide capital for expansion and other business plans. However, [MCO] believes that [Melco Philippines’] listed status in recent years has not contributed to its ability to raise funds despite considerable efforts and expenses being incurred to maintain its listed status.”
The company noted that the offer price “is towards the high-end of the range of fair market price per [Melco Philippines] share as opined by an independent valuer and represents an approximately 14% premium over the three-month volume weighted average price of the [Melco Philippines] Shares ended on 7 September 2018.”
The tender offer and delisting, the company said, would allow MCO “to consolidate its interests in MRP to better support and facilitate MRP’s future business plans.”
Melco said the tender offer report will be filed with the Philippine Securities and Exchange Commission (SEC) and PSE next Monday, September 17.
In its midyear report, Melco stated that “given the fast-growing trajectory of Southeast Asian tourism along with continued upgrades in Philippine transportation infrastructure projects, [Melco] anticipates continued growth in [the Philippine] market since it is expected that regional and global tourist arrivals, overnight visitors from ASEAN countries and overall gaming activity at our resort in Manila will be further boosted.”
The company reported total net revenue of HKD19.8 billion ($2.5 billion) for the first half of the year, 1.5% less than the first half of the previous year. Profit for the period was HKD1.1 billion ($135.4 million), more than 50% higher than the corresponding period in 2017.
Melco is looking to expand to Japan, when its government issues three casino licenses in the next couple of years. “Our core focus for the near to mid-term continues to be Japan… We have had a Tokyo office in place since 2017 along with a local leadership team and just opened an Osaka office in the first half of 2018 and are now fully engaged to explore local partnerships and to further build up our local presence,” the company said in its interim report.
