Minority shareholders snub Melco tender offer in Manchester

MANILA, Philippines - Macau casino giant Melco Crown Entertainment Ltd., which is putting up a gaming complex in Manila, failed to buy out the minority shareholders in listed firm Manchester International Holdings Unlimited Corp. (MIH).

In a disclosure to the local stock exchange, the new controlling owner of MIH said it concluded its month-long tender offer on Feb.11.

“The tender offer period expired at 12 noon on Feb. 11. No shares were tendered in the tender offer,” the firm said.

On Jan. 11, the local unit of Hong Kong-based Melco offered to buy all of the remaining 17.426 million Class A and 11.156 million Class B shares held by the public.

Melco targeted to buy out the 6.94 percent total outstanding capital stock of MIH owned by minority shareholders at P3.1491 and P3.5498 each for the A and B shares, respectively.

Shares of MIH, which will be renamed Melco Crown (Philippines) Resorts Corp., were trading above the tender offer price since the entry of Melco. The stock closed at P13.20 apiece on Feb. 11.

Class A shares are available only to Filipinos while Class B shares can be bought by foreign and local investors. The shares are usually classified to facilitate the enforcement of the 40-percent ownership cap on foreigners.

Last year, Melco acquired 28.58 million shares or 93.06 percent of dormant MIH for P1.26 billion. The sale excluded MIH’s investments in pharmaceutical firm Interphil Laboratories and property firm Lancashire Realty Holding Corp.

Melco will use MIH 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.

Melco is a joint venture between Australian billionaire James Packer and Macau gambling tycoon Lawrence Ho.

The casino operator has placed a large bet on expanding to one of the world’s emerging casino markets, as it 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 the area, which is being groomed as the Philippines’ version of the Las Vegas strip, next to port mogul Enrique Razon’s Solaire Casino & Resort.