City of Dreams Manila owner backs out of delisting plan

City of Dreams Manila owner backs out of delisting plan

Last month, MCO Investments, the largest shareholder of Melco Resorts and Entertainment (Philippines) Corp (MREC), announced that it was going to voluntarily delist from the Philippines Stock Exchange (PSE). The company added that it would hold a tender offer to repurchase 1.57 billion shares, said to be worth around $207.4 million as part of the delisting project, but it now appears that the company had second thoughts. It announced last Friday that it is withdrawing its delisting request, but still wants to move forward with the MREC tender offer.

City of Dreams Manila owner backs out of delisting planMCO Philippines owns about 73% of Melco Philippines, which operates City of Dreams Manila. It announced the withdrawal through a filing with the PSE and the tender offer would be established to see the company increase its stake in Melco Philippines. The tender offer was expected to begin on Oct. 22, but was delayed due to issues the company is facing over the offer.

Investors have asserted that the tender offer is “undervalued” and “unfair.” They argue that the price at which the shares are being sold is less than what the company offered for its stock in 2013. According to MCO Philippines, it was hoping to sell the shares at just $0.13—about 50% lower than what was initially offered.

The tender offer was expected to be completed by October 30 and the delisting on November 13. However, MCO Philippines needs to have at least 95% of MREC’s shares to have the delisting approved. With the battle raging over the share price, and the end of the month quickly approaching, the chances of a deal being reached are slim.

The delisting is an effort by the company to reduce its corporate structure, according to Melco International Development president and managing director Even Winkler. He told Reuters earlier this month, “What is happening is effective corporate clean up that would allow for greater efficiency within the group. We feel we are putting forward a full and fair value to minority shareholders.”

While the company is trying to reduce its corporate structure on one front, it is increasing it on another. In an announcement from last Thursday, Melco International listed its Studio City International Holdings Ltd. company on the New York Stock Exchange.