Melco Ices Philippines Delisting Procedure Between Shareholder Unrest

This is Actually the second time That the Hospitality and Casino giant puts Philippines delisting plans on ice

Hospitality and gaming firm Melco Resorts & Entertainment today announced that it’d postpone a tender offer for its Philippine subsidiary for another time, Reuters reports. The company also withdrew its application to delist the unit from the Philippine Stock Exchange amid resistance from minority shareholders over the proposed cost.

Melco announced its plans to delist last month, citing its failure to raise capital for planned expansion of its Town of Dreams Manila incorporated resort as the reason for the decision. A tender offer was initially scheduled for October 1, together with Melco describing that its purpose was to increase its majority shareholding in its Philippine unit rather than delist. The tender offer was then postponed for Monday, October 22. A new date for the deal is yet to be announced by the gaming company, which is being run by Macau billionaire Lawrence Ho.

Melco currently operates one of three incorporated hotels in the Philippine capital. According to filings with the Philippine Stock Exchange, the company planned to buy back shares in its Philippine unit at PHP7.25 per share and also to delist the business at a transaction valued at around PHP11.38 billion (approx. $211.5 million).

But, minority shareholders contended that the cost announced was “unfair” and “undervalued” the gaming and hospitality company. Melco sold shares in its local unit at a cost of PHP14 five decades ago as it sailed on the Philippine Stock Exchange.

Roel Refran, Chief Operating Officer of the bourse, told Reuters that they have indeed received letters from worried shareholders and have advised Melco to cover the problems before moving forward with its plans. The company needs 95 percent of the unit’s issued shares in order to have the ability to proceed with the delisting.

In prior comments on its plans, Evan Winkler, President and Managing Director of Melco International Development, has stated that the purpose of the planned delisting was for the firm to simplify its corporate structure.

But, Melco recently surfaced its Macau subsidiary Studio City International Holdings Ltd. on the New York Stock Exchange, a move that Reuters analysts note has just “additional to the complexity of the company’s corporate structure. ”

Studio City’s New York Debut Takeaways

Studio City International Holdings, a company that spun out of Melco Resorts & International, currently operates the Studio City incorporated resort in Macau. The property comes with a casino with 970 slot machines and 250 gaming tables as well as VIP gambling facilities, hotels, and dining and entertainment facilities. Both hotel towers — The Star Tower and The Celebrity Tower — are linked with the planet ’s figure-8 ferris wheel.

Studio City surfaced Thursday on the New York Stock Exchange, pricing its initial public offering at $12.50 per American depositary share. The company marketed 28.75 million ADS and raised $359.4 million. Shares closed at $15.50 per share or up 24 percent on Studio City’s trading day.

The sum raised will help Studio City fund construction on vacant property surrounding its incorporated resort. The company needs to make sure that it finishes development work on such property before 2021 or other wise face penalties from the government of Macau.

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