Another 4,312,500 million American Depositary Shares (ADSs) of Studio City International Holdings Limited was sold during the company’s initial public offering (IPO) at the New York Stock Exchange (NYSE), making for a total of 33,062,500 ADSs issued.
Parent company Melco International Development Limited said in a filing that Studio City’s underwriters for the offering had exercised their over-allotment option in full, purchasing at $12.50 per ADS, which are equivalent to four Studio City Class A ordinary shares. The ADSs were introduced to the public just last month.
Underwriters for the IPO were Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. International plc, Bank of Communications Co., Ltd. Macau Branch, and ICBC (Macau) Capital Limited. They exercised the over-allotment option on November 19, at the end of the 30 days in which they were allowed to exercise it.
With the purchase of the additional shares, proceeds of the IPO totaled $406.7 million, up from $359.4 million previously.
“As at the date of this announcement, after the Underwriters’ exercise of over-allotment option as above-mentioned, Melco Resorts’ interest in Studio City is approximately 54.1% and Melco Resorts remains as Studio City’s majority shareholder,” the statement read. Prior to the additional purchase, Melco Resorts’ stake in Studio City had decreased from 60% to 57.3%.
For the IPO, Melco Resorts’ MCE Cotai Investments Limited had agreed to purchase 15,330,000 ADSs, while its affiliates purchased 10,220,000 ADSs.
Studio City shares last traded for $16.33 a share.
Early this month, it was announced that 1.5% of the IPO’s proceeds were to be distributed to shareholders, about $5.4 million. This was before the dilution of shares, however, so does not include the later proceeds. Melco International Chairman and CEO Lawrence Ho, as majority stakeholder, made $2.9 million from the payout.
For its third quarter, Melco Resorts reported net revenue of $1.22 billion, down 11% from the same period last year. Adjusted earnings fell 26% year on year to $295.4 million, while net income was $9.6 million, down 91.7% from the same period last year.
While VIP gambling turnover was up in the company’s Macau casinos, VIP win rate was lower. Mass market table drop and mass table win rate, meanwhile, went up during the period.
