U.S. IPO in the works
The board of Melco Resorts & Entertainment Philippines Corp. has announced a plan to voluntarily delist from the Philippine Stock Exchange.
After its announcement of the plan, a Melco spokesperson informed GGRAsia that MCO Philippines Investment Ltd., an indirect wholly-owned subsidiary of Melco Resorts, “viewed the listed status as an important tool allowing Melco Resorts Philippines to raise funds in the Philippines public market, in order to provide capital for expansion and other business plans.”
That viewpoint has changed, the email continued. The listing “has not contributed to Melco’s ability to raise funds, despite considerable efforts and expenses being incurred to maintain its listed status.”
MCO Philippines Investments Ltd., the unit’s major investor, will repurchase 1.54 billion shares held by the public, or about 27 percent of the outstanding capital stock of Melco Resorts Philippines. It will offer PHP7.25 (US$.13) per share for a total cost of nearly PHP11.19 billion (US$208.1 million).
Analysts at Sanford C. Bernstein say the delisting is a good move that could streamline the company’s ownership structure and open the door to future expansion, reported Casino.org. “We view this as a very favorable price,” the Bernstein analysts stated. “While the tender price is at a premium to recent trading (as would be necessary to facilitate the tender), it is a 21 percent discount to the highest price reached.”
At the same time, Melco’s Studio City in Macau has formally applied to float its shares on the New York Stock Exchange, reported the South China Morning Post. Studio City has informed the U.S. Securities and Exchanges Commission of its plans to launch an initial public offering. The IPO will be in the form of American depositary shares stock of an overseas company traded on a U.S. exchange, the Post reported. Deutsche Bank, Credit Suisse and Morgan Stanley will all be involved in the IPO, according to Melco.
Melco is expected to be a frontrunner to operate one of the first three casino resorts in Japan, and also is in the process of building the $650 million City of Dreams Mediterranean in the Greek-controlled southern part of Cyprus.
