THE operator of City of Dreams Manila plans to exit the Philippine Stock Exchange (PSE) by November, after it conducts next month a tender offer to buy out all minority shareholders.
In a disclosure to the stock exchange late Friday, Melco Resorts and Entertainment (Philippines) Corp. (MRP) said its controlling shareholder, MCO (Philippines) Investments Ltd. (MCO Investments) had filed an initial tender offer report with the Securities and Exchange Commission on Sept. 14.
The tender offer is set to run from Oct. 3 to 30, with the acceptance of shares tendered to be completed by Nov. 7. The shares are scheduled to be crossed from the stock exchange by Nov. 14, depending on the approval of the PSE.
The company named Maybank ATR Kim Eng Securities, Inc. as the tender offer agent for the transaction.
MCO Investments seeks to acquire up to 1.54 billion common shares in MRP at P7.25 apiece, which means it will spend P11.18 billion to buy out all minority shareholders. The company said the exercise will “increase and consolidate its interests in MRP to better support and facilitate MRP’s future business plans.”
The tender offer price represents around a 14% premium over the three-month volume weighted average price of MRP shares.
The tender offer is being conducted as part of MRP’s plans for voluntary delisting, which it announced last Sept. 10. Under PSE rules, MCO Investments must acquire at least 95% of MRP’s outstanding capital stock in order for the local bourse to entertain its petition for voluntary delisting. Should the company fall short of the 95% requirement, it said it will still proceed with the request for voluntary delisting.
MRP noted that the tender offer will allow shareholders to liquidate their investments prior to the company’s delisting. Should shareholders try to sell or transfer their shares in the company once it is out of the PSE, the transaction will be subjected to a capital gains tax and documentary stamps.
The company cited its “inability to raise funds despite considerable efforts and expenses being incurred to maintain its listed status” as the reason for taking its shares out of the stock exchange.
MRP reported a net income of P1.89 billion in the first half of 2018, surging 437% year-on-year. Operating revenues dipped by 1% to P16.54 billion due to the adoption of a new revenue standard “which resulted in higher commissions paid to gaming promoters being deducted from casino revenues.” — Arra B. Francia