MANILA, Philippines - It is going to be a Philippine backdoor listing after all for Macau-based casino operator Melco Crown Entertainment Ltd.
Melco Crown said on Friday it will buy a Philippine Stock Exchange (PSE) -listed shell company, Manchester International Holdings Unlimited Corp., which will serve as its vehicle to manage a casino joint venture with Belle Corp. in Entertainment City Manila.
Melco Crown said in a disclosure to the Hong Kong Stock Exchange it has signed an acquisition agreement to acquire 93.06 percent of Manchester, a pharmaceuticals manufacturer and property-management firm, for P1.259 billion. The purchase price includes liabilities of Manchester amounting to P1.06 billion.
The remaining 6.9 percent of Manchester is held by public shareholders; Melco Crown is expected to make a buyout offer if the transaction will be finalized, as provided in Philippine laws.
The deal, which is still subject to certain closing conditions, is seen to create a fourth PSE-listed casino play riding on hopes that the country, through Entertainment City, can eventually compete with regional gaming hubs like Macau and Singapore.
Currently, Entertainment City participants Bloomberry Resorts Corp., led by businessman Enrique Razon Jr., Alliance Global Group Inc. of Andrew Tan, and Melco’s partner in the project, Henry Sy’s Belle Corp., are listed on the PSE.
“Upon completion, the company currently intends to manage and operate its Philippines businesses through MIH [Manchester],” Melco Crown said in its filing.
“The company’s Philippines operations may, among others, include its Philippine project, a casino, hotel, retail and entertainment complex,” it added, referring to its 50-50 joint-venture agreement with Belle.
Melco Crown was earlier reported to be studying an initial public offering in the Philippines before the proposed acquisition of Manchester was announced on Friday.
Melco Crown, owned by billionaires James Packer and Lawrence Ho, is one of six companies granted concessions to operate casinos in Macau, its web site showed. Its portfolio includes City of Dreams and The Studio City project on the Cotai Strip.
Manchester class A shares, up more than three times since the start of November on buyout rumors, jumped 49.9 percent to P16.49 each on Friday. Its class B shares, which are open to foreign buyers, also rose 49.9 percent to P16.46 each.
Belle said on October 25 that it tapped Melco as its operating partner for the Belle Grande Manila Bay project, which would cost at least $1 billion and will open by the first half of 2014.
The partnership was viewed positively by market analysts, who noted that Belle needs an experienced foreign partner to help draw the lucrative overseas VIP market, viewed as the key to the success of Entertainment City.
Belle is on track to be the second licensee to open in the 120-hectare complex after Bloomberry’s Solaire casino, which will open by March next year. AGI’s project, which is a joint venture with Malaysia’s Genting Group, will open in 2016. The fourth licensee is part of Universal Entertainment of Japan.