Hong Kong-based Melco International Development Limited has announced the submission of subsidiary Studio City’s application to be listed on the New York Stock Exchange (NYSE).
In its filing, Melco International revealed the proposed initial public offering (IPO) price of $10.50-$12.50 for each American depositary share (ADS), equivalent to four of Studio City Class A ordinary shares.
The “Global Offering” is expected by Melco International to generate between $301.9 million to $359.4 million, based on the proposed share price.
The terms of the IPO, according to Melco International, have yet to be declared effective by the U.S. Securities and Exchange Commission (SEC), and are subject to approval by the NYSE.
The Studio City resort is located in Macau. Melco Resorts subsidiary MCE Cotai, which holds a 60% stake in Studio City, and “certain affiliates” of New Cotai, which holds the remaining 40% stake, have expressed an interest to purchase 25.55 million ADSs, that represent 88.9% of the total amount to be offered, Melco International said, adding that “Studio City and the underwriters are under no obligation to sell any ADSs to MCE Cotai or such affiliates of New Cotai.”
Existing Studio City shareholders will be entitled to a portion of the ADSs issued, although they may choose to receive a cash equivalent. Melco International said it will offer 1.5% of the proceeds, about $4.5 million to $5.4 million, to existing shareholders, but said that “[d]etails of the proposed distribution in specie have not yet been finalized.”
Melco International Chairman and CEO Lawrence Ho, who holds approximately 53.6% of Studio City shares, had indicated to the company that he would take the cash option. “Having regard to such confirmation received from Mr. Ho, the Company would subscribe for 800,376 Class A ordinary shares, equivalent to 200,094 ADSs, in order to enable Shareholders other than Mr. Ho and his associates to have the opportunity to receive ADSs pursuant to the distribution in specie if they wish, and are eligible, to do so,” Melco International said.
Meanwhile, the Philippine Stock Exchange (PSE) has asked Melco International subsidiary Melco Resorts and Entertainment (Philippines) to discuss its impending tender offer with shareholders, according to news outlet BusinessWorld.
The operator of City of Dreams Manila announced a delay to the tender offer, originally scheduled for last week, after statements from traders that suggested the PHP7.25 ($0.13) tender offer share price was “unfair” to shareholders, compared to its initial share price of PHP14 ($0.26) in 2013.
MCO (Philippines) Investments Limited, which owns about 73% of Melco Philippines, needs to increase its total holdings to 95% to proceed with the intended delisting.
PSE CEO Roel Refran said, “I was telling [Melco Philippines] to engage already with the minority shareholders. You also need them to understand so that they can decide and make a decision whether to sell or stay put… The more important discussion that needs to flow in, is, ‘How can we as investors be assured that this is a fair value?’”
Melco Philippines has indicated that even if MCO fails to acquire the sufficient number of shares, that it will proceed with the delisting, “subject to the approval of the PSE.”