Melco Resorts and Entertainment (Philippines) Corporation announced a delay in the tender offer of its shares, “for a period of approximately two weeks or until such time that it otherwise determines,” according to a filing with the Philippine Stock Exchange.
The company must be at least 95% owned by MCO (Philippines) Investments Limited before proceeding to be delisted, a move intended to “better support and facilitate [Melco Philippines’] future business plans,” according to parent company, Hong Kong-based Melco International Development Limited.
The tender offer, however, had been criticized as “unfair” by some local traders, as reported by news outlet BusinessWorld last week, due to the tender offer price of PHP7.25 ($0.13) per share being merely about half of when the stock was first offered in 2013.
In reaction to the BusinessWorld article, Melco Philippines stated that the 2013 share price of PHP14 ($0.26) had been determined “based largely on market demand for the investment resulting from a marketing process conducted by international investment banks.” The tender offer price, on the other hand, was determined by independent financial adviser FTI Consulting Philippines, Inc., which had made its calculation based on the stock price over the past year, with the stock closing at PHP6.21 ($0.12) last September 7, just before the tender offer was announced.
“Depending on when an investor purchased [Melco Philippines] shares, they will experience very different financial outcomes… More importantly, the fact that the tender offer price may be lower than an investor’s acquisition cost does not, in and of itself, make the tender offer price unfair,” Melco Philippines said in its earlier filing.
MCO already has about a 73% stake in Melco Philippines, which operates the City of Dreams Manila casino. The tender offer had originally been scheduled to end on October 30, and the delisting to occur on November 13.
Melco International has been working on an expansion of its operations worldwide, having already expressed its interest to build one of three large-scale casinos in Japan sometime in the next decade.