Melco Crown gains backdoor listing

MANILA, Philippines - Melco Crown Entertainment Ltd., the joint venture between Australian billionaire James Packer and Macau gambling tycoon Lawrence Ho, will acquire 93.06 percent of inactive firm Manchester International Holdings Unlimited Corp. for P1.26 billion.

In a disclosure to the Philippine Stock Exchange, Manchester said the sale excludes the selling shareholders’ investments in pharmaceutical firm Interphil Laboratories and property firm Lancashire Realty Holding Corp.

The acquisition would result in Macau casino giant Melco gaining automatic listing on the local bourse.

Hong Kong-based Melco will use Manchester as its vehicle to manage and operate a $1-billion integrated casino project along the coast of Manila Bay. The entertainment complex is in partnership with Belle Corp., a leisure developer and gaming firm controlled by the family of retail tycoon Henry Sy.

The proposed acquisition is subject to certain conditions precedent and is expected to take place on completion date.

From only P5.99 on Dec.3, Manchester’s share price more than doubled on rumors it was acquistion target. Manchester B shares closed nearly five percent to P17.28 while the A shares rose 2.67 percent to P16.90 apiece.

Melco, which has placed a large bet on expanding to one of the world’s emerging casino markets, will invest around $600 million in the project to be sourced from a combination of cash and debt financing amounting to around $325 million.

Belle and Melco will each have an estimated economic interest of 50 percent in the project. Economic interest from the project will be derived from the gaming revenues and the lease of commercial space in the entertainment center.

This would be Melco’s first foray in the Philippine gambling market, which is forecast to hit $3 billion in revenues by 2015.

The project will be the second complex to open in this area, groomed to become the Philippines’ version of the Las Vegas strip, next to port mogul Enrique Razon’s Solaire Casino & Resort.

Lawrence Ho, co-chairman and chief executive officer of Melco, said the project is a step closer towards realizing the group’s vision of becoming one of the leading gaming companies in Asia.