MELCO Resorts and Entertainment (Philippines) Corp. (MRP) will proceed with its tender offer at the end of October, but will keep its offer price at P7.25 apiece.
The listed operator of the City of Dreams Manila said in a disclosure on Tuesday that the tender offer by its majority shareholder, MCO (Philippines) Investments Limited, will start on Oct. 31. The tender offer will run for a total of 20 business days.
MCO Investments aims to buy back up to 1.57 billion common shares in MRP from the public, in a bid to increase its shareholdings in the company. It currently holds 72.54% of the outstanding MRP shares.
“The Bidder believes the Tender Offer gives existing shareholders of MRP the opportunity to sell their MRP Shares, in cash, at a premium to the current trading price of the MRP Shares,” the company said.
The tender offer price represents around a 14% premium over MRP shares’ three-month volume weighted average price as of Sept. 7, the last trading day before the company announced its voluntary delisting plan.
The offer price is also 2.4% higher than MRP’s closing price of P7.08 each on Tuesday. This is 0.98% or seven centavos lower from the previous session’s close.
“On the other hand, the Tender Offer would also allow the Bidder to increase and consolidate its interests in MRP to better support and facilitate MRP’s future business plans,” MRP added.
The company reiterated that the tender offer will no longer be part of its plan to apply for voluntary delisting at the Philippine Stock Exchange, following complaints from a number of investors on the pricing and other investment decisions.
“The change of purpose for the Tender Offer, which led to the withdrawal of the petition to delist by MRP on Oct. 19 is aimed at alleviating certain investors’ concerns that the potential delisting may exert undue pressure on their decision process related to the acceptance of the Tender Offer,” MRP said.
The company explained that shareholders should not be pressured into accepting the tender offer, given that it has withdrawn its petition for voluntary delisting at the PSE last week.
“Investors are therefore assured that they are free to conduct their evaluations and arrive at a decision whether to tender their shares at their absolute discretions,” the company said.
It also noted that investors who do not agree with MRP’s tender offer price are not obligated to participate in the offer.
Amid the change in purpose for the conduct of the tender offer, analysts pointed out that this could indicate a shift in MRP’s strategy to exit the bourse. Should investors participate in the tender offer, this could bring down MRP’s public float to less than 10% from the current 27.05%, making it eligible for involuntary delisting procedures. — Arra B. Francia
