Foreign group eyes 3.6% of local bingo gaming firm

A foreign investment holding company is in talks with Leisure and Resorts World Corp. (LRWC) for the acquisition of a 3.6-percent stake in the latter for as much as P52.44 million, the publicly-listed gaming firm said in a disclosure to the Philippine Stock Exchange.

The foreign group holds an investment portfolio of strategic assets in Asia, with particular focus on China, Korea, Hong Kong and the Philippines.

Under the plan, the foreign investor group will acquire 28.5 million LRWC shares at a price between P1.74 and P1.84 each, which approximates the prevailing market price of the shares. The shares will come from the unissued portion of the authorized capital of LRWC.

Proceeds from the offering will be used by LRWC to fund the expansion plans of its subsidiaries, including First Cagayan Leisure and Resorts Corp.

LRWC and the prospective investor are in their final stages of negotiations which is expected to reach completion by the end of the month. However, the final terms and conditions of the investment as well as any definitive agreement between LRWC and the prospective investors shall still be subject to the approval of their respective boards of directors.

The company earlier acquired majority control of First Cagayan through a share issuance valued at P32 million or P800 each share. With the purchase, LRWC’s ownership in First Cagayan, a service provider for the online gaming industry, has increased to approximately 50.75 percent. First Cagayan has an existing license to develop, operate and conduct Internet and gaming enterprises and facilities in the Cagayan Special Economic Zone (CEZA).

First Cagayan, on behalf of CEZA, processes applications from and, upon approval, issues licenses to international operators wanting to locate within the zone. As master licensor, it is also tasked to regulate and monitor all Internet gaming related activities to ensure compliance with established rules and regulations governing operations.

LRWC president Alfredo B. Benitez said the additional investment in First Cagayan is in line with the company’s plan to penetrate the $10 billion global online gaming industry, which is projected to double within the next three to five years, most of the growth of which will come from the Asian region. LRWC is a holding company for gaming firms led by AB Leisure Exponent Inc. ("ABLE"), which has a franchise to operate bingo games nationwide and is currently the largest operator in the country with an estimated market share of about 50 percent.