Plans to pay “cash on hand” for shares
Melco International Development Ltd. has announced plans to buy all the outstanding shares of Entertainment Gaming Asia and then take the company private. The disclosure was made in a filing last week by the company, which leases electronic gaming machines to Asia’s gaming sector.
Melco International, controlled by gaming titan Lawrence Ho, “is reviewing potential strategic alternatives” for Entertainment Gaming Asia and is “considering making an offer to acquire all of the outstanding common stock” of the company.
The filing said Melco was considering an offer to stockholders “in the range of approximately US$2.10 to US$2.25 per share, in cash via a tender offer.” It added “any such transaction would be financed using available cash on hand.” The acquisition is not a sure thing, however; the filing from Entertainment Gaming Asia added, “Melco International notes that no determination to make an offer has been made and Melco International may not make any such offer.”
Melco International currently owns approximately 64.8 percent of the smaller company, which undertook a restructuring effort last year. In 2016, Entertainment Gaming Asia sold its assets related to gaming product manufacturing as well as its gaming assets in Cambodia. It now has operations only in the Philippines.
The company reported consolidated revenue from continuing operations of US$357,000 for the fourth quarter of 2016, down 47.2 percent from the prior-year period.
