Casino investor Melco International Development Ltd announced on Monday that it has agreed to sell its entire stake in MelcoLot Ltd, a Hong Kong-listed firm that supplies technology to the mainland China lottery market.
Melco International is selling – via another subsidiary – its 40.65-percent stake in MelcoLot to mainland China-based 500.com Ltd, for a total consideration of approximately HKD322.2 million (US$41.3 million).
500.com is a provider of online sports lottery in mainland China. In November 2013, 500.com was able to conduct an initial public offering on Nasdaq in New York on the strength of having what it said was permission for a “pilot programme” agreed by China’s Ministry of Finance to sell tickets for the China sports lottery via an online platform.
Melco International – controlled by gaming entrepreneur Lawrence Ho Yau Lung – said it would cease to have any interest in MelcoLot once the deal is completed. The deal is expected to close on June 6, 2017.
As a result of the acquisition, 500.com will be required to make a mandatory general offer – of HKD0.252 per share – for all MelcoLot shares and share options that it does not own, according to Monday’s filing.
Melco International said the sale of its stake in MelcoLot represents “a good opportunity” for the group to divest its non-core investments, so that the firm’s management “can focus on core operations and other business initiatives with more dynamic growth potential”.
Melco International now owns a majority position in Melco Resorts and Entertainment Ltd, after increasing its stake to 51.3 percent in December. The former partner in Melco Resorts, Australia-based casino operator Crown Resorts Ltd disposed of its entire stake in that company earlier this month.
Nasdaq-listed Melco Resorts owns and operates casino properties in Macau and in the Philippines, and is eyeing a casino licence in Japan. Hong Kong-listed Melco International has recently been approved for a casino licence in the Republic of Cyprus.
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